Europe open: Shares start mixed; HSBC falls as FY misses estimates

European markets opened lower on Wednesday amid another raft of corporate earnings, with HSBC in focus as the bank delivered a record jump in annual earnings that missed estimates, sending the shares in the lender lower.

The pan-European Stoxx 600 index was down 0.12% to 491.29 in early deals with regional bourses mixed and struggling for direction.

In economic news, the UK recorded its largest January budget surplus in at least three decades, fuelling talk of a pre-election tax-cut giveaway, even though the government has pencilled in a second round of austerity cuts to public services starting next year.

There £16.7bn surplus, the largest surplus since monthly records began in 1993, was double that of January 2023.

However, economists at the EY Item Club said Finance Minister Jeremy Hunt’s headroom for tax cuts was limited, given investors would be “reining back their expectations on interest rate cuts this year, a weaker-than-expected economy, and some fiscal downsides from lower inflation”.

In equity news, HSBC fell despite a 78% jump in annual pre-tax profits to $30bn, missing forecasts of $34bn as it took a $3bn hit from its investment in a Chinese bank.

Glencore fell after annual results reflected the slide in global metals prices.

NKT made gains as the Danish power cable and optical parts maker posted strong annual results.

Reporting by Frank Prenesti for Sharecast.com