The FTSE 100 index opened on a positive note, rising by 6 points to reach 9,651 after a record close on Friday. However, HSBC emerged as a notable underperformer within the blue-chip index, experiencing a nearly 2% decline. The bank announced that it would set aside $1.1 billion in provisions for its third-quarter results, due tomorrow, following a partial loss in an appeal regarding a lawsuit stemming from the infamous Bernard Madoff Ponzi scheme.
HSBC served as a service provider for various funds that had invested with Madoff’s firm. The lawsuit, which was filed by Herald Fund against HSBC’s Luxembourg division in 2009, aims to reclaim assets lost in the fraud. The recent ruling by the Luxembourg Court of Cassation rejected HSBC’s appeal concerning the restitution of certain securities claimed by Herald but permitted a separate claim regarding cash restitution. In light of this development, HSBC plans to file a second appeal with the Luxembourg Court of Appeal. The bank has suggested that the financial repercussions could vary significantly depending on the outcome of this appeal.
Meanwhile, global stock markets are buoyed by optimism surrounding US-China trade relations. Following comments from former President Donald Trump, who indicated that a trade deal was imminent, Asian markets experienced significant rallies. Japan’s Nikkei soared by 2.5%, surpassing the 50,000 mark for the first time, while South Korea’s Kospi surged by 2.6% to reach record highs. Other major Asian indices, including Hong Kong’s Hang Seng and the Chinese exchanges in Shanghai and Shenzhen, also recorded gains.
Stock futures point toward a higher open in Europe and the US, bolstered by positive sentiment stemming from last week’s strong performance by the S&P 500 and the Nasdaq. Trump is expected to meet with Chinese President Xi Jinping later this week in South Korea, heightening anticipation for future negotiations. He stated his confidence in achieving a favorable agreement, expressing a willingness to finalize a deal concerning TikTok soon.
In commodities, gold prices dipped by 1% to $4,069 per ounce as demand for safer assets diminished, following a recent uptick in price. Oil prices also recorded slight increases, supported by reduced fears of a trade war impacting economic growth and demand for crude oil.
In the United Kingdom, the Competition and Markets Authority (CMA) is considering launching an extensive investigation into the planned £4 billion acquisition of sandwich maker Bakkavor by competitor Greencore. Preliminary assessments suggest potential anti-competitive implications in the chilled sauces market. The regulator would move to an in-depth inquiry unless the involved parties can address these concerns within a specified timeframe. Greencore’s CEO, Dalton Philips, expressed optimism about working with the CMA and Bakkavor to facilitate the transaction’s completion.
Bakkavor, known for producing various food products for major retailers like Tesco and Marks & Spencer, is founded by two Icelandic brothers who are poised to benefit significantly should the acquisition proceed. Both companies have until November 3 to propose remedies to mitigate the CMA’s competition concerns.
