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HSBC drags down FTSE as profit disappoints

HSBC drags down FTSE as profit disappoints

HSBC (HSBA) has weighed on the FTSE after the bank more than doubled full-year profits but disappointed investors hoping for more.

Shares in the bank fell 3.7% to 732.4p, weighing on the UK blue-chip index, which was down 18 points, or 0.3%, at 7,230.

HSBC reported profits of $17.2 billion (£12.3 billion) for 2017, well ahead of 2016's $7.1 billion but falling short of analyst expectations of $19.7 billion, according to Reuters.

'Rising interest rates and a thriving global economy have helped HSBC to post a healthy increase in profits in 2017,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.

'However the market was expecting more, and has consequently marked down the share price. That's not going to help the FTSE, given the gravitational pull HSBC exerts on the index.'

HSBC was joined at the bottom of the index by InterContinental Hotels (IHG), a key holding for Citywire AAA-rated Terry Smith in his Fundsmith Equity fund.

The shares dropped 4.4% to £44.92 as the group, which operates the Crowne Plaza and Holiday Inn brands, as it disappointed investors hoping for a special dividend, a feature of recent years.

The group will instead be using the money to fund a move upmarket, targeting the acquisition of small luxury hotel brands.

BHP Billiton (BLT) was also among the fallers, down 4.5% at £14.92 as a 25% rise in profits fell short of expectations and costs rose at the miner.

On the FTSE 250, shares in Fidessa (FDSA) soared 22% to £35.50 after Swiss firm Tememos (TEMN.S) launched a £1.4 billion bid for the financial software group, a major holding for Citywire AA-rated Nick Train.

Hikma Pharmaceuticals (HIK) was also a riser, up 8.9% after the group named former Teva Pharmaceutical TEVA.TA executive Sigurdur Olafsson as its new boss.

Among the faller, Dunelm (DNLM) slumped 9.1% to 587.5p after the homewares retailer warned costs might outstrip sales growth.

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Nick Train
Nick Train
5/155 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 40.19%
Terry Smith
Terry Smith
10/460 in Equity - Global (Performance over 3 years) Average Total Return: 76.26%
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