Global stocks rise after HSBC; dollar firmer
LONDON (Reuters) - World stocks rose on Monday, supported by better-than-expected first-quarter results from HSBC which eased concerns about the banking sector, while the dollar rose towards last week's two-month peak.
Major financial markets were calm after China's southwest province of Sichuan was hit by a strong earthquake, which was felt across much of China and as far west as Bangkok. Shanghai stocks fell around 1 percent before closing up on the day, while the yuan slipped in offshore non-deliverable forwards against the U.S. dollar.
A firmer dollar tamed recent rallies in energy and commodity prices, with oil falling from last week's record high and gold also slipping.
HSBC took bad debt charges related to its U.S. consumer finance business of $3.2 billion, much smaller than expected. It also said first-quarter profits were higher than the same period last year as growth in Asia and elsewhere helped counter a hit from its exposure to U.S. home loans.
"We had some fairly negative expectations built in (for HSBC) ... it's not as bad as feared," said Jeremy Stretch, market strategist at Rabobank.
The FTSEurofirst 300 index was up 0.6 percent while MSCI main world equity index rose 0.17 percent, edging closer to last week's four-month peak.
European banking stocks rose 0.3 percent.
Sterling also rose briefly against the dollar after HSBC's results, paring losses to stand down 0.1 percent on the day.
The dollar rose a quarter percent against major currencies, helped by expectations that the Federal Reserve may soon end its campaign since last September to cut interest rates to shore up the economy.
The iTraxx Crossover index, most-widely watched indicator for European credit market sentiment, tightened by 6 basis points to 450 bps.
Emerging sovereign spreads tightened 1 bp while emerging stocks rose 0.15 percent.
The June Bund future was down 0.15 percent as safe-haven flows abated in the face of firmer stocks.
U.S. light crude was down 0.5 percent at $125.34 a barrel after setting all-time peaks above $126 on Friday.
Gold also slipped to $878.20 an ounce.
(Additional reporting by Veronica Brown; editing by Stephen Nisbet)
