HSBC drags FTSE back as investors eye inflation forecasts

Banking giant HSBC sapped some of the confidence from the blue chip index today as it announced that it was aiming to slash costs by £2.1bn.
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The news followed a bruising start to the week for banks who have already earmarked billions for potential payouts over dubious insurance protection sales.
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<strong>HSBC</strong> fell 1.3 per cent after Europe's biggest bank said it is reviewing its US cards business and streamlining its wealth management and retail banking operations as it targets major savings. <br />
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Meanwhile <strong>UK economic data</strong> released today showed the country's goods trade deficit widened more than expected in March, giving back some of the strong improvement seen in the first two months. <br />
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The Office for National Statistics said that the goods trade gap widened to &pound;7.66bn from &pound;6.99bn in February, some way above the &pound;7.25bn economists had expected.
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Other fallers on the FSTE included <strong>ITV </strong>- down more than two per cent as fears of falling advertising revenues hit the stock. <br />
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Oil services firm <strong>John Wood Group</strong> dropped more than one per cent after announcing a $1.7bn cash return to shareholders. It said it was on track to hit full year tax targets despite the North Sea tax hike. <br />
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On the upside <strong>commodity prices</strong> supported heavyweight miners and energy stocks as figures from China signalled that demand was still strong. <br />
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Results from the world's largest steel producer <strong>ArcelorMittal</strong> showed an acceleration in profit which also helped to buoy the sector. <br />
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On the UK retail front <strong>Sainsbury's</strong> announced a 12.8 per cent rise in annual pre-tax profit and increased market share against its rivals. <br />
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However its shares moved little after Sainsbury's chief executive Justin King said he did not expect consumer spending to improve this year. Meanwhile rival <strong>Morrison</strong> was down 2.38 per cent after going ex-dividend. <br />
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But <strong>Marks &amp; Spencer</strong> also enjoyed a lift, rising by 1.62 per cent after receiving a broker upgrade by JP Morgan Cazenove. <strong>Next</strong> was up by a similar amount, with <strong>Burberry</strong> also on the up. <br />
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Online delivery service<strong> Ocado</strong> dropped by nine per cent after the FTSE-250 listed company issued figures showing its sales growth was slowing. <br />
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Ex-dividend factors knocked 12.02 points off the FTSE 100 with <strong>BP</strong>, <strong>Inmarsat</strong>, <strong>Morrison Supermarkets, Randgold Resources,</strong> <strong>Rexam,</strong> <strong>Royal Dutch Shell,</strong> <strong>Sage, Unilever</strong> and <strong>Whitbread</strong> all losing payout attractions. <br />
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The Bank of England's closely watched quarterly inflation report containing its latest growth and inflation forecasts is set to dominate the agenda for the remainder of the trading day.
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Meanwhile<strong> Brent crude</strong> rose past $118 in early trading after a jump in China's demand.<br /><br />

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