HSBC's profits slump drags FTSE 100 Index into the red
London's blue chip index was dragged into the red by HSBC after the bank reported a whopping 62% drop in annual profits on Tuesday.
The FTSE 100 ended the day down 0.34% or 25.03 points at 7274.83.
HSBC was the worst performer on the index, dropping 6.5% or 46.6p to 665.7p, after posting a worse-than-expected drop in pre-tax profits to 7.1 billion US dollars (£5.7 billion), down sharply on the 18.9 billion US dollars (£15.2 billion) for 2015.
The bank blamed a string of one-off charges, such as the sale of its Brazilian operations, as well as hefty write-downs from a restructuring.
Jasper Lawler, a senior market analyst at London Capital Group, said: "These results were a dash of reality for investors in the banking sector who perhaps got a little ahead of themselves in hopes of financial deregulation, higher global growth and rising interest rates."
However, "with lower write-downs and more time to benefit from higher global rates, we would expect next quarter to be a bit rosier", he added.
In currency markets, the pound was trading higher by 0.1% against the US dollar at 1.246.
Against the euro, sterling was up 0.75% at 1.182.
That is despite fresh data showing that the surplus in public sector net borrowing, excluding state-owned banks, grew by £300 million to £9.4 billion last month, compared to January 2016.
Economists had pencilled in a more generous figure of £14 billion.
Across Europe, the French Cac 40 and German Dax rose 0.49% and 1.18%.
In oil markets, Brent crude prices rose 1.6% to 57.01 US dollars per barrel (£45.71) as investors celebrated news that Opec members were sticking to production cut pledges and were expecting further falls in oil inventories.
In UK stocks, shares in Anglo American fell 9.5p to 1,350p as the mining giant reaped the benefits of recovering commodity prices and a cost-cutting drive, swinging to an annual pre-tax profit of 2.6 billion US dollars (£2 billion).
Shares in Capita rose 20p to 534p after the embattled outsourcing giant announcing it had written off £50 million of historic contracts just two months after warning over profits.
Mediclinic International dropped 48p to 754p after reporting further challenges in its Abu Dhabi business, which are expected to contribute to a steeper drop in full-year revenue.
Shares in Plumb Center owner Wolseley fell 18p to 4,997p, despite inking a deal that will see it expand further into Switzerland.
The biggest risers on the FTSE 100 were Capita Group up 20p to 534p, Rolls-Royce Holdings up 24.5p to 732.5p, Sage Group up 13.5p to 648p, and Worldpay Group up 4.5p to 272.3p.
The biggest fallers on the FTSE 100 were HSBC down 46.6p to 665.7p, Mediclinic International down 48p to 754p, Hargreaves Lansdown down 41p to 1,322p, and Royal Bank of Scotland Group down 7.1p to 251.8p.