FTSE 100 to extend gains for fourth day in a row ahead of volatile week

• FTSE 100 down 18 points
• Mining shares dip
• BP boosted by results

9.22am: HSBC shares shrug off break-up calls

Shares in HSBC Holdings PLC (LSE:HSBA) are edging higher as the bank faces calls for a break-up from a major investor.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "HSBC shareholders are pretty sanguine today about the calls for the bank to be split up and its Asia business hived into a separate entity with shares rising.

"The bank’s stated determination to continue its pivot to Asia while also spanning the world, appears to have reassured shareholders that there won’t be an immediate change of course following demands from the bank’s largest shareholder, the Chinese insurance giant Ping An. 

"If anything the demand for a more intense focus on Asia under a separate entity, is a vote of confidence in the steps management have already taken to boost growth by selling its French retail operation, and the US mass market business and ploughing the capital being released into historically stronger performing regions in Asia. 

"But there is a risk surging covid cases in China could take their toll with the bank already having experienced reduced equity market activity, wealth management slowdowns and closed branches after outbreaks in Hong Kong. China’s beleaguered real estate sector is also a continuing headwind for the bank, which a separate Asia focused entity would be particularly susceptible to."

HSBC is up 0.58% to 504.2p.

Overall the market remains in the doldrums, with the FTSE 100 down 18.48 points or 0.24% at 7526.07.

AJ Bell investment director Russ Mould said: "“After the UK dozed through the drama of flash-crash Monday on the markets, the FTSE 100 certainly remained half-asleep on Tuesday when UK stock trading reopened after the bank holiday...

“Metal producers and pharmaceuticals acted as a drag on the index, with the former extending losses seen after the recent quarterly updates from mining sector – most of whom reported operational challenges.

“Markets are particularly worried about lockdown in China and how fast US interest rates might go up."

9.00am: Citi's flash crash error

Citigroup has put its hands up to a flash crash in markets on early on Monday..

With activity fairly quiet due to public holidays in much of the world, a sudden plunge in a number of markets came as a shock and caused trading to be briefly halted.

Nordic stocks were hardest hit but they were not alone.

The US banking giant admitted responsibility late on Monday, saying: "This morning one of our traders made an error when inputting a transaction. Within minutes, we identified the error and corrected it."

8.17am: Miners undermine market after disappointing data from China

As the shortened but busy trading week gets underway, leading shares have fallen back in early trading.

Ahead of the UK manufacturing data for April, the FTSE 100 is down 27.39 points or 0.36% at 7517.16.

With eurozone factory output growth stalling thanks to shortages and price rises exacerbated by Russia's invasion of Ukraine, UK manufacturing is also expect to show a decline in activity.

Meanwhile the weaker than expected manufacturing report from China has undermined the mining sector, with Glencore PLC (LSE:GLEN) down 2.38% and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) 2.35% lower.

Among the risers BP PLC (LSE:BP.) is 1.81%  better after the oil giant more than doubled its first quarter underlying profits to US$6.245bn and unveiled a US$2.5bn share buyback.

But it has also taken a charge of US$25.5bn to cover its exit from Russia, although this has not stopped renewed calls for a windfall tax on the company and its peers.

6.50am: Volatile week expected

The FTSE 100 is predicted to extend its gains for a fourth successive session ahead of a big week of central bank action in the first week of May.

Earlier this morning the Reserve Bank of Australia made its first interest hike in over 10 years, from 0.1% to 0.35%, also raising its inflation forecasts and reducing GDP forecasts as it reacts to inflation. The Aussie dollar was sent sharply higher.

It's expected to be a volatile week in markets, with tomorrow the US Federal Reserve is expected to hike rates by 50 basis points and on Thursday the Bank of England is expected to make an increase of half that size.

Today, London’s blue-chip index is set to follow US market increases overnight rather than mimic the falls in Europe yesterday, with a 53-point advance envisaged by spread-betters, with the Footsie having finished last week at 7,544.55.

Tech stocks led Wall Street higher, with the Nasdaq Composite index climbing 1.6%, followed by the S&P 500 with a 0.6% rise and the Dow Jones up 0.3%.

But Asian and European markets both got off to a poor start to the month, on the back of China purchasing managers’ index (PMI) data showing that economic activity in April fell back by more than expected.

China’s non-manufacturing PMI index fell to its lowest since February 2020, when the country was locked down in the first reaction to the Covid-19 outbreak, with the manufacturing PMI also dropping.

“It is clear that the disruptions caused by the Chinese government's lockdown measures in trying to combat the Omicron variant are having a drastic effect on economic activity,” said market analyst Michael Hewson at CMC Markets.

“With little sign that the Chinese government is willing to admit its zero-Covid strategy is doomed to fail, as reports grow that Beijing could follow Shanghai into lockdown, the prospect of any significant improvement here looks slim.”

Manufacturing PMI data is due out for the UK today, with activity expected to have slowed to 55.3 in April from 55.5 in March.

6.50am: Early Markets - Asia / Australia

Several markets in the Asia Pacific are closed for a holiday on Tuesday, including China, Japan, Singapore and India.

South Korea’s Kospi slipped 0.07% while Hong Kong’s Hang Seng index gained 0.13%.

Australia’s S&P/ASX200 fell 0.42% after RBA Governor Philip Lowe signalled a sharp increase in the RBA’s inflation forecast, noting that ‘the central forecast for 2022 is for headline inflation of around 6% and underlying inflation of around 4 ¾ %.