Sudden 10pc spike in HSBC shares caused the FTSE 100 index to briefly inch into positive territory
Fat fingers aren’t just responsible for excruciating iPhone auto-corrects. On Thursday, City traders blamed a “fat finger mistake” for the sudden 10pc spike in HSBC , which caused London’s FTSE 100 index to briefly inch up 0.5pc into positive territory.
The bank’s shares jumped from around 630p to 688p after a trader was thought to have entered too many zeros into the quantity field of an electronic trade.
“The rumours are the trade could have cost the culprit as much as £400,000. If anything, I doubt they will get too much sleep tonight,” said Joshua Raymond, chief market strategist at CityIndex.
The sharp swing prompted the London Stock Exchange (Other OTC: LDNXF – news) to suspend trading of the bank’s shares for around five minutes. HSBC closed up 3.90, or 0.62pc, to 630.20p. Two hours earlier Diageo (LSE: DGE.L – news) had dropped 11pc before regaining the loss over a five-minute stretch in a similar clumsy trade.
HSBC’s move upwards was even more unusual, given its emerging markets exposed peers were among the heavy fallers on Thursday.
London’s blue-chip index slumped for its seventh trading session after the US Federal Reserve trimmed $ 10bn (£6.07bn) off its $ 65bn bond-buying programme and figures revealed Chinese manufacturing has slipped to a six-month low.
The FTSE 100 fell by 5.83, or 0.09pc, to 6,538.5 points, while the FTSE 250 swung between green and red throughout the day. The mid-cap market, which is more representative of British industry, closed up by 13.49 at 15,701.80 points.
Diageo was the biggest loser on the premier leaderboard, falling 90, or 4.71pc, to £18.20 after the drinks maker said first-half growth had stalled on weak Chinese markets, which have cut back excessive corporate gift-buying.
“Investors value Diageo for its scale, brand portfolio and high quality financial management. While those with a long term horizon may be sanguine about the organic slowdown. We think others should be cautious about full-year 2014 and full-year 2015 earnings as delivery now appears more dependent on continued and accelerating margin performance,” analysts at Canaccord said.
Rival FTSE 100 drinks maker SAB Miller sank 48.5p to £27.53, while other blue-chips also bore the costs of emerging markets exposure. Luxury goods group Burberry lost 41p to £14.11, power-generator business Aggreko (Dusseldorf: 4A4A.DU – news) fell 51p to £15.60, insurer Prudential (HKSE: 2378.HK – news) dipped 4p to £12.40 and Standard Chartered dropped 27p to £12.61.
Meanwhile, listed private equity group 3i edged 2.3 higher to 378.3p after the firm dropped its planned emerging markets fund in the wake of the emerging markets rout currently under way.
Video search group Blinkx (Other OTC: BLNKF – news) closed down 56.7, or 32.2pc, at 118.7p after investors were spooked by accusations made in a blog post about the company by a Harvard Business School professor. Ben Edelman, who researches internet advertising, claimed Blinkx had close links to companies that used “deceptive tactics” to sneak third-party software on to users’ computers. The company had more than £350m wiped off its market value before releasing a statement that said it “strongly refutes the claim”.
BSkyB stayed at the top of the blue-chip risers, gaining 33.5, or 3.97pc, to 878p after the satellite broadcaster said first half revenues were up 6.3pc to £3.8bn, boosted by smartphone app Sky Go Extra.
Despite revenues rising, profits fell at BSkyB after its spending in the last Premier League rights auction. Investors were cheered as UBS (Xetra: UB0BL6 – news) raised the possibility that BSkyB and rival BT might call a truce on their tussle for football rights. “BSkyB sounded open to a wholesale deal with BT on sports and we think a deal is likely between May and August this year (ie in between football seasons). We think this would be a major positive catalyst for the shares and give both BT and BSkyB less incentive to be aggressive in any forthcoming Premier League rights auction,” UBS analysts wrote.
Oil major Royal Dutch Shell (Xetra: R6C1.DE – news) gained 22p, or 1.04pc, to £21.47 after new boss Ben van Beurden said he will ramp up the company’s asset disposal plans and ditch the controversial Arctic drilling programme after a shock quarterly profit warning.
Serco shares slumped 86.3 to 423.2p after the security services firm warned that it expects operating profits to be 10pc to 20pc lower than market estimates on the back of currency fluctuations and costs relating to its corporate renewal programme. The shock disappointment hit rival G4S (Copenhagen: G4S.CO – news) , which has also been embroiled in scandal relating to overcharging on Government contracts. G4S (LSE: GFS.L – news) fell 9.20 to 237.7p.
Online gambling companies 888 and Playtech (LSE: PTEC.L – news) failed to cash in on their upbeat trading statements. 888 closed the day flat at 140p after reporting a 10pc rise in revenues in the fourth quarter on the back of a strong casino performance. Playtech fell 11 to 693p despite forecasting that revenues and earnings will be ahead of current analysts’ consensus. However, the bullish updates lifted gaming peer Rank by 8 to 136p to the top of the FTSE 250.
Mitchells & Butlers (LSE: MAB.L – news) rose by 10.60 to 449.1p after the pub group reported a strong festive trading period, which saw it serve 193,000 Christmas Day dinners.
Miner Lonmin sank 17.40 to 311p after it said labour union strikes in South Africa may cause it to revise its forecasts for the year.
AG flew up 15.50, or 3.84pc, to 418.7p on the FTSE 100 after analysts at Bank of America Merrill Lynch said it has an advantage over its peers as Ryanair faces falling yields, Air France KLM has a weak balance sheet and Lufthansa faces volatile Asian-European yields.
Sausage maker Cranswick (LSE: CWK.L – news) was lifted 56p to £12.99 after the company said consumers were turning to pork as a cheaper meat, hiking sales by 14pc over the quarter.