London pre-open: Stocks to nudge up; HSBC in focus

London stocks were set to nudge higher at the open on Wednesday following a slightly lower close a day earlier, as investors mulled the latest UK borrowing figures and results from the likes of HSBC and Rio Tinto.

The FTSE 100 was called to open around five points higher.

Figures released earlier by the Office for National Statistics showed that the UK posted its largest budget surplus for the month of January since records began in 1993, at £16.7bn.

This exceeded the £7.5bn surplus in January 2023, but was smaller than consensus expectations of £18.5bn and the Office for Budget Responsibility’s Autumn Statement forecast of £18.2bn.

In corporate news, HSBC posted a record jump in annual profits and announced a $2bn share buyback but missed forecasts as it was forced to take a $3bn hit from its exposure to a Chinese bank.

The Asia-focused lender said full-year pre-tax profit rose 78% to $30.3bn driven by high global interest rates, but below the $34.1bn average estimate of brokers compiled by the bank.

However it also took a $3bn impairment on the its stake in China's Bank of Communications.

Mining giant Rio Tinto said that commodity price movements led to a $1.5bn hit to underlying profits in 2023, though results were partly offset by a stronger US dollar and lower energy prices.

Underlying EBITDA totalled $23.9bn for the 12 months to 31 December, down 9% on the year before. Average prices for copper fell by 3% over the year, and dropped 17% for aluminium, along with further declines seen in diamonds and industrial minerals; gold prices however gained 8% and for iron ore prices rose 0.5%.

GSK said the interim analysis of the ‘LATITUDE’ phase three trial by its HIV specialist unit ViiV revealed that its long-acting injectable treatment Cabenuva showed superior efficacy compared to daily oral therapy in individuals facing challenges with treatment adherence.

The FTSE 100 pharmaceutical giant said the Data Safety Monitoring Board suggested modifying the study to cease randomisation and offer participants receiving daily oral therapy the option to transition to long-acting injectable therapy, based on the promising results. It said the full dataset would be presented at an upcoming scientific conference.