London pre-open: Stocks to fall as investors mull HSBC results

(Sharecast News) - London stocks were set to fall at the open on Tuesday after HSBC shares slid in Asian trade following third-quarter results and as oil prices remained elevated.

The FTSE 100 was called to open down around 50 points.

Investors will be mulling data showing that shop price inflation rose in October to its highest level in two and a half years.

According to the latest BRC-NIQ shop price monitor, shop price inflation increased to 2.1% year-on-from 1.4% in September. This was above the three-month average of 1.6%.

British Retail Consortium chief executive Helen Dickinson said: "The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years. Food inflation rose again, driven by ambient groceries, although retailers still delivered plenty of promotions on sweet treats ahead of Halloween. Non-food inflation climbed to an almost three-year peak as high energy and transport costs pushed up prices with furniture, flooring and DIY particularly affected this month.

"The message to the Chancellor ahead of tomorrow's Budget could not be clearer: act now or prices will keep on rising. Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes. Without a change of course, October's jump in inflation is only the beginning. Our recipe for the Chancellor is simple. Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price."

On the corporate front, HSBC posted a 32% jump in third-quarter pre-tax profit to $9.6bn, with revenue 5% higher at $18.6bn, mainly reflecting growth in banking net interest income. Both figures were a touch below forecasts, however.

Net interest income - the difference between what banks charge for loans and what they pay out for savers' deposits - was up 6% on the same period a year earlier to $9.3bn.

Chief executive Georges Elhedery said: "Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities. It also reflects consistent execution of our strategic priorities with pace, precision and discipline.

"As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders."

Elsewhere, consumer goods group Reckitt Benckiser cut its full-year sales growth guidance after third-quarter trading fell short of expectations, hit by manufacturing constraints affecting Lysol in North America and a slowdown in China's vitamins and supplements market.

Core like-for-like revenue rose 3.3% to £2.69bn, supported by emerging markets and a return to growth in Europe, but the company lowered its annual growth forecast to 3.5% to 4.5% from 4% to 5%.