MONDAY MARKET CLOSE: HSBC gains from talk of UK spin-off

Shares in HSBC made further strong gains amid continued speculation over the banking giant’s future in the UK.

The HSBC Tower in Canary Wharf, London. Picture: PA

Weekend reports said the group was considering a £20 billion spin-off of its UK business, known as Midland bank before it was bought by HSBC in 1992.

IG market analyst Joshua Mahony said: “This comes after chairman Douglas Flint disclosed on Friday that the firm could relocate its headquarters away from the UK in response to regulatory and structural reforms.”

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The speculation saw the lender end the day up 19.6p, or 3.1 per cent, at 649.3p. Fellow Asia-focused bank Standard Chartered gained 45.5p to 1,115.5p – an increase of 4.3 per cent – topping the blue-chip risers’ board.

The FTSE 100 Index finished the session 33.28 points higher at 7,103.98, helped by a positive session for other financial stocks including Hargreaves Lansdown – up 34p at 1,215p – and Prudential, which rose 36.5p to 1,668.5p.

However, Tesco dropped 4p to 220.8p after a credit rating downgrade from Fitch. Rival supermarket Sainsbury’s was down 2.1p at 266p and Morrisons dipped 0.8p to 193.3p.

Elsewhere, Scottish Gas parent group Centrica heated up 4.6p or to 269.1p after telling investors that it was trading in line with expectations, with household energy consumption rising on the back of colder-than-normal weather in the UK and North America.

Perth-based rival SSE headed in the opposite direction, closing down 17p at 1,588p.

The steepest decline on the FTSE 100 was Aggreko, the Glasgow-based temporary power provider, which closed down 32p at 1,640p.

Water company United Utilities was another heavy faller, sinking 13.5p to 989.5p, while rival Severn Trent dropped 28p to 2,170p.