HSBC first half profit up 10%

City sources predict the FTSE 100 will open six points lower than Friday's close of 6,696.28.

Stocks to watch

HSBC said first half profits were up by 10%, beating expectations. The bank said earnings were driven by a strong performance in Asia.

The bank said adjusted revenue was up 4% to $30,772m, driven by revenue growth in client-facing global banking and markets, principally in equities and foreign exchange.

Northgate, a specialist in light commercial vehicle hire, announced a refinancing of the company’s debt facilities.
Northagate has issued a €100m, 2.38% seven-year debt private placement to an institutional investor. As a result, the group’s principal bank facility has been reduced to £424m from £499m.

In the press

UK Chancellor George Osborne is aiming to eclipse the Thatcherite privatisation boom of the 1980s and 1990s as he oversees the biggest-ever sale of publicly-owned corporate and financial assets in one year. The chancellor hopes to dispose of £32bn-worth of assets this financial year, smashing the record set in 1991 when the Tory government raised £11.8bn - £20.5bn in today’s money – through the sale of BT, National Power and regional electricity companies. - Financial Times

Britain’s mortgage borrowers will be warned this week to brace themselves for higher interest rates on what City of London traders have dubbed “Super Thursday”. At least two, perhaps three, of the nine members of the Bank of England’s interest rate-setting committee are expected to cast their votes for a rate rise. Confirmed hawks Martin Weale and Ian McCafferty, who voted for rate rises throughout the second half of 2014 before changing their minds as inflation plunged to zero earlier this year, have signalled they could soon be ready to see borrowing costs rise. - Guardian

ValueAct, the US hedge fund that has become Rolls-Royce’s largest shareholder, is urging the company to accelerate cost cuts in its core aerospace business, according to people familiar with the fund’s thinking. The San-Francisco based activist fund is also likely to encourage an eventual sale of the company’s non-aerospace division when the board conducts a strategic review. - Financial Times

US close

US stocks declined as data revealed weak wage inflation and an unexpected downward revision to a consumer confidence report.

The US 10-year Treasury yield fell to a three-week low, as subdued wage inflation put doubts on the likelihood of an interest rate increase by the Federal Reserve in September. The employment-cost index rose 0.2%, the smallest gain in three decades and below the forecast for a 0.6% gain.

In company news, oil giant Exxon Oil edged lower after reporting its second quarter profit were halved by the slump in oil prices, while sector peer Chevron plunged after posting disappointing second quarter results ahead of the opening bell.