Britain's FTSE 100 at record high as HSBC shares surge

Britain's FTSE 100 at record high as HSBC shares surge

27 April 2015, 16:38

On Monday U.K. stocks traded at a record level, with HSBC PLC set for its strongest session in nearly two years after a report the company is seeking to spin off its U.K. retail bank.

The FTSE 100 gained 0.7% to 7,118.92, on track for its best closing level, as all sectors advanced. According to FactSet data, the blue-chip index’s previous all-time closing high of 7,096.78 was registered on April 15.

Stocks rose with equities across Europe on the hopes that Greece’s difficult talks with creditors may improve as the team handling the talks was revamped by Greek Prime Minister Alexis Tsipras. There are concerns that if Greece doesn’t resolve its debt troubles, it may have to leave the eurozone.

HSBC jumped 3.6% in London, its best gain since July 2013, after the Sunday Times reported that the institution is weighing a deal valued at 20 billion pounds ($30.4 billion) that would see it spin off its retail bank.

On Friday the lender said that it is thinking about moving its headquarters out of London as it estimates shifts in the U.K. regulatory landscape. Leaving London could prompt HSBC, which generates most of its revenue from Asia, to shed its British retail operations.

A number of economists noted that HSBC has previously denied the information that it will rid itself of the U.K. retail assets. What’s key this time around is it “shows that HSBC [is] considering all options to maximize value for shareholders,” said Berenberg analyst James Chappell, in a note Monday.

“We continue to believe HSBC is undervalued considering its 6% yield and that there has been significant change already in the business,” Chappell added.

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