London stocks are expected to open lower on Tuesday, with the FTSE 100 forecast to decline around 56 points as investors assess HSBC’s latest earnings, developments in the Middle East and the outlook for interest rates ahead of Wednesday’s Autumn Budget.
Futures indicate the FTSE 100 will open 0.5% lower at 10,710.93, reversing much of Monday’s 76.97-point gain, which saw the blue-chip index close at 10,767.33.
HSBC reported a 32% increase in third-quarter pre-tax profit to $9.63 billion, compared with $7.30 billion a year earlier, supported by higher interest income and continued growth across its international banking operations.
The Asia-focused lender reported total operating income of $17.79 billion, up 6%, while net interest income increased 6% to $9.31 billion and net fee income rose 1.7% to $3.57 billion.
Earnings per share climbed 46% to $0.41, reflecting stronger profitability during the three months ended 30 September.
HSBC also announced a new $1 billion share buyback programme, which it expects to complete before the end of 2026, and maintained its quarterly dividend at $0.10 per share.
Despite the stronger results and additional shareholder returns, HSBC shares fell 5.6% in Hong Kong, putting the bank under scrutiny ahead of London’s opening bell.
Chief Executive Georges Elhedery said the results demonstrated continued demand for HSBC’s services as customers navigated global economic uncertainty, while the bank remained focused on simplifying its operations and improving shareholder returns.
The update begins a busy reporting period for major UK banks, with Standard Chartered due to publish results on Wednesday and Lloyds Banking Group reporting on Thursday.
Oil markets also remained in focus as diplomatic efforts intensified to prevent further escalation of the Middle East conflict.
Brent crude eased to $115.84 a barrel, compared with $117.02 on Monday, following talks involving senior officials from Saudi Arabia, Turkey, Pakistan and Iran.
The discussions were aimed at reducing tensions between regional powers and avoiding renewed hostilities following months of disruption to energy markets.
Iran described the talks as positive, although no formal agreement was announced, with the parties agreeing to continue negotiations.
Elevated oil prices remain a concern for investors because of their potential impact on inflation, business costs and central bank monetary policy.
Meanwhile, UK political developments attracted attention after Prime Minister Andy Burnham called for a renewed debate over Britain’s relationship with the European Union, including the possibility of restoring freedom of movement.
Downing Street subsequently clarified that no final policy position had been reached, while Home Secretary Shabana Mahmood stressed that discussing closer EU ties did not amount to a commitment to change existing arrangements.
The debate comes ahead of Wednesday’s Budget, when investors will be watching for announcements on taxation, investment, government borrowing and economic growth.
Wall Street finished higher on Monday, with the Dow Jones Industrial Average gaining 0.3%, the S&P 500 rising 0.7% and the Nasdaq Composite advancing 0.9%.
Asian markets were also broadly positive on Tuesday, with Japan’s Nikkei 225 rising 0.3%, China’s Shanghai Composite gaining 0.7% and Hong Kong’s Hang Seng advancing 0.8%. Australia’s S&P/ASX 200 climbed 0.5%.
In currency markets, sterling eased to $1.3327 against the dollar, compared with $1.3353 at Monday’s London close, while remaining broadly stable against the euro at €1.1941.
Gold slipped below the $4,000 level to approximately $3,999.91 an ounce, while Bitcoin traded below $80,000.
Investors also face a busy US economic calendar, including durable goods orders, consumer confidence, house prices and manufacturing data.
The Federal Reserve begins its two-day monetary policy meeting on Tuesday, with markets watching for indications of how policymakers intend to respond to persistent inflation and uncertainty over economic growth.
The FTSE 100 faces a cautious opening despite stronger overnight performances in the US and Asia, with HSBC’s share price weakness, geopolitical uncertainty and the approaching UK Budget likely to influence trading.
Attention will now turn to further banking results, the outcome of the Federal Reserve meeting and the Chancellor’s fiscal announcements, which could determine market direction over the remainder of the week.
