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Signs of easing inflation in British shops helped further improve the mood of investors and saw the FTSE 100 post a new record level in early trading on Tuesday.
The rapid turnaround in sentiment can be seen most clearly in the performance of gold which having moved to nearly $4,400 is now back below $4,000.
Results from some of the big names which dominate the US market will likely dictate whether the market can extend its recent momentum into November as will the Federal Reserve’s latest decision on interest rates tomorrow.
A cut is widely expected but, with most US data releases paused thanks to the shutdown in Washington, the Federal Reserve’s ability to make an informed decision is impaired.
HSBC
Having got the bad news out of the way early, with yesterday’s revelation of a provision linked to Bernard Madoff’s Ponzi scheme, HSBC had some good news to deliver to investors with its third-quarter update.
While the Madoff-linked hit saw profit come in below expectations at a headline level, on an underlying basis the business is performing well and, crucially, somewhat better than the market was expecting.
A key metric for any bank is net interest income – the difference between what the bank pays out to savers and receives from borrowers in interest – so the boost to guidance here and double-digit quarterly growth are significant.
They back up CEO Georges Elhedery’s assertion that HSBC is becoming ‘a simple, more agile, focused bank’.
Slightly higher than anticipated operating costs are a slight negative, and investors will be watching future updates closely to see if this becomes a trend, and exposure to a tricky Hong Kong property market is another risk.
However, these numbers will give Elhedery a boost after the recent negative reaction to the decision to pause buybacks and use cash to buy out minority investors in Hong Kong’s Hang Seng bank and the Madoff news.
Airtel Africa
It may not be as high profile as other FTSE 100 companies but Airtel Africa’s share price performance so far this year has been nothing short of blockbuster and its latest results have helped to extend the recent positive run.
The mobile phone and internet carrier is growing rapidly – it entered the African mobile market in 2010 and has established leading positions in several countries on the continent in the intervening period.
Airtel Africa has invested significant sums in mobile infrastructure and network modernisation in several markets to enable the provision of digital services such as data and digital payments to customers and this investment is paying off.
A combination of higher data and mobile money usage and more favourable currency movements, a significant factor given the company’s geographic focus, helped underpin the strong numbers.
A meaningful increase in the dividend indicates confidence in the outlook, as does a plan to boost capital expenditure.
Novartis
Swiss pharmaceutical firm Novartis may have met forecasts thanks to decent growth in its new drug portfolio, but investors focused instead on the sharp slowdown in its blockbuster heart drug Entresto thanks to pressure from generics in the US market.
This illustrates the cliff edge risk facing drug companies when key treatments lose their patent protection and this explains why Novartis has been on such a big M&A spree in 2025 as it looks to bolster its pipeline.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
