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HSBC, Experian weigh on UK's FTSE
May 7, 2014 / 11:16 AM / in 4 years

HSBC, Experian weigh on UK's FTSE

* FTSE 100 down 0.4 pct
    * HSBC takes most points off index after profits fall
    * Cautious outlook hits Experian's shares

    By Sudip Kar-Gupta
    LONDON, May 7 (Reuters) - A fall in the shares of HSBC
 bank and credit data firm Experian pushed down
Britain's top equity index on Wednesday, adding to signs of
weakness in corporate earnings as the market extended a losing
    The blue-chip FTSE 100 index was down 0.4 percent,
or 26.23 points, at 6,772.33 points in mid-session trading. The
index had hit a 2-month closing high last Friday after five
straight days of gains.
    A 1.2 percent fall at HSBC took the most points off the FTSE
after the bank posted a 20 percent fall in first quarter profits
and said customer activity was muted in April. 
    "We do not feel there is an upgrade in these results but
HSBC remains a good yield stock that performs relatively well in
times of economic stress," said Mirabaud Securities analyst Alex
    Experian was the worst-performing FTSE stock in percentage
terms, falling 6.1 percent after Chief Executive Don Robert said
growth in the first-half of this year could be constrained.
    The FTSE hit a peak of 6,867.42 points in late January,
which was close to its highest level since early 2000, but has
since fallen back due to concerns about a slump in emerging
market economies and mounting unease about clashes in Ukraine
between Kiev authorities and pro-Moscow militants.
    The FTSE is trading on a 12-month forward price/earnings
ratio of about 13 times, against its five-year average of 11,
Thomson Reuters Datastream shows. Meanwhile, analysts have been
steadily lowering profit forecasts since the start of 2014.
    Peel Hunt equity strategist Ian Williams said he saw little
scope for FTSE gains until at least mid-year, and that the
market may need more signs of takeover activity to push higher.
    "Valuations have come as far as they can in the short term
purely on an earnings basis so it does require that corporate
activity to add a bit of upside potential," he said.

 (additional reporting by Tricia Wright; Editing by John

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