HBOS gains despite profits decline

European equities markets were mixed Thursday, with declines coming as a result of US data showing that the economy grew more slowly than expected in the second quarter and the highest number of new unemployment claims were filed last week in over five years.

What gains there were in the region were only modest.

In London, the FTSE 100 dropped 0.16 percent to 5,411.9 while the FTSE 250 was down 0.33 percent to 8,856.7 in volatile trade.

Mortgage lender HBOS (LSE: HBOS) was up 5.16 percent even though it reported a decline in profits of 56 percent in the first half of the year, while in the pharmaceuticals sector AstraZeneca (LSE: AZN; NYSE: AZN) added 3.26 percent on higher second quarter profits than had been anticipated.

The oil sector was higher, with Tullow Oil (LSE: TLW; OTC: TUWLY)adding 5.85 percent on the session, but Royal Dutch Shell (LSE: RDSA, RDSB; NYSE: RDS.A, RDS.B) saw declines in both its A and B shares.

The travel and leisure sector was lower, while retailers also saw losses, some of them in the 4 percent to 5 percent range on the session.

In the rest of Europe, the FTSE Eurofirst 300 was up 0.05 percent to 1,180.12 while the Dax was 0.3 percent higher to 6,479.56 and the IBEX gained 0.54 percent to 11,881.3, but the CAC-40 dropped 0.19 percent to 4,392.36.

Utilities saw gains and the telecommunications sector was higher, but the pharmaceuticals sector was mixed and airlines and carmakers saw declines.

Most equities markets in the Asia-Pacific region saw gains on Thursday after prices rose on commodities, including oil, during Wednesday’s session.

Tokyo markets were mixed, with the Nikkei 225 adding 0.07 percent to 13,376.81 and the Topix gaining 0.05 percent to 1,303.62 while the Mothers market of small and mid-caps dropped 2.14 percent to 510.06.

Even though the Nikkei gained on the day, it ended the month 0.8 percent lower.

Utilities saw gains even though Kansai Electric (TYO: 9503) said it lost ¥27.5 billion in the fiscal first quarter and Tokyo Electric Power (TYO: 9501) predicted it would suffer a loss for the full year, while the pharmaceuticals sector was up despite a report from Daiichi Sankyo (TYO: 4568) that operating profits fell 41 percent in its fiscal first quarter.

The auto parts sector was lower on broker downgrades.

In the region as a whole, the oil sector saw gains, but shippers were lower on profits reports and on a broker downgrade of the sector as a whole, from “neutral” to “negative”.

The Straits Times Index was up 0.14 percent to 2,929.65, while the Hang Seng added 0.18 percent to 22,731.1 and the Sensex gained 0.48 percent to 14,355.75.

In Australia, the S&P/ASX200 was 0.82 percent higher to 4,977.4 and the Sydney Ordinaries added 0.88 percent to 5,052.6, while in South Korea the Kospi was up 1.08 percent to 1,594.67.

Decliners included Taiwan’s Taiex, which dropped 0.65 percent to 7,024.06 and the Shanghai Composite, with a decline of 2.15 percent to 2,775.72.

Wall Street was mixed in midday trade, with the Dow Jones Industrial Average down 1.28 percent to 11,435.83 and the S&P 500 falling 0.94 percent to 1,272.25, but the Nasdaq Composite had added 0.03 percent to 2,330.38.

The declines came after the Commerce Department reported that the US economy grew more slowly than expected in the second quarter, advancing by only 1.9 percent when it was expected to gain around 2.3 percent.

In addition, the Labor Department reported that last week’s first-time jobless claims rose to 448,000, the highest number of new filings in over 5 years.

Also pushing equities lower was ExxonMobil’s (NYSE: XOM) second quarter report, which showed that production dropped 7.8 percent on strikes and seized assets, while record high oil prices meant activation of contractual obligations to give governments where it has operations a larger portion of its output.

Despite the disappointment that sent ExxonMobil’s shares down 2.9 percent by the middle of the day, the oil giant reported a record $11.68 billion in earnings in the quarter, with revenues up 40 percent to $138.1 billion.

Story link: HBOS gains despite profits decline