European Stocks Decline on HSBC Results

Most of the European stocks suffered drops on today as shares of HSBC Holdings retreated and also a survey showed that the industries of China slowed down during last month. The benchmark gauge of European stocks, the Stoxx Europe 600 Index declined by 0.2% and is currently at 288.48. More than 60% of the total companies registered declined on today. Incidentally, on last week, the gauge was more or less unchanged, mainly due to the inconclusive election results from Italy. Many investors fear that such results will worsen the debt crisis in the Euro area. However, there was positive factor involved for last week’s results too as the US economic data showed better results than forecasts.

According to the Senior Strategist of PFA Pension A/S, Witold Bahrke, the equities probably have run a bit faster in comparison to the reality of a still subdued. Witold added that if this is combined with the increasing political noise of the European region, things definitely don’t look good for the European stocks.

The non-manufacturing purchasing managers’ index for China, the 2nd largest economy in the world went down to 54.5 for the month of February, from its value of 56.2 in January. The data was released by the National Bureau of Statistics and China Federation of Logistics and Purchasing.

Incidentally, in an attempt to cool the real estate market, Chinese Government has already intensified the 3-year campaign as it has ordered larger deposits and stricter enforcement of the sales taxes. The regional branches of the People’s Bank of China are expected to implement the measures in conjunction with the price control targets that have been set by the local Governments.

HSBC has tumbled by 2.3% and is currently priced at 711.4 pence per share. The pretax earnings of the company went down by 5.6% in last year, mainly because of a record settlement for the anti-money laundering sanctions throughout US. HSBC has also been charged to revalue its own debt as well. For doing that, the lender took around $5.2 billion and the actual profit was at $20.65 billion, trailing the initial estimate set of $23.49 billion.

Anglo American Plc. went down by 2.6% and is currently at 1850.5 pence per share. Nomura Holdings Inc. downgraded its shares to reduce from neutral. The biggest decline on the Stoxx 600 was experienced by Debenhams, that of 14%.