The rally has not lasted long. With banks going into reverse as gloom about the global economy reasserts itself, the FTSE 100 is now down nearly 1.5%.
US futures - which had initially indicated a 79 point opening - are now just 15 points higher. So the FTSE has fallen 46.87 points to 3578.96, after earlier attempting a minor rally, although volumes are nothing to shout about.
Banks are the biggest fallers, with Barclays 8.6p lower at 79.1p, Lloyds Banking Group has lost 4.2p to 45.2p, and Royal Bank of Scotland is down 1.2p at 21.4p. HSBC - which unveiled a record-breaking £12.5bn rights issue yesterday - has dropped 7.5p to 391.5p. Panmure Gordon analyst Sandy Chen cut his price target on HSBC from 610p to 330p. He said:
"We have revised our forecasts and valuations using a set of macro assumptions that seem much gloomier than those used by management. Amidst concerns about impairment charges and derivatives counterparty exposures, we have cut our 2009 estimated earnings per share from 55¢ to 12¢, with a further fall to 9¢ in 2010 before a weak recovery in 2011.
"We must emphasise that we actually find many things to like about HSBC – its re-strengthened capital ratios, its better than match-funded balance sheet structure, its relative lack of 'funny' accounting practices such as Level 3-type derivatives – it is just a pity that HSBC is, along with almost all other banks, exposed to the same depressing global macro trends."
But Standard Chartered, which reported a good set of profit figures, is bucking the general trend, up 12p to 599p.
