UKX FTSE 100 Index

By Emily Horton

EasyJet soars following earnings

The FTSE struggled on Tuesday, as the London banking sector came under pressure after earnings from Swiss bank UBS Groups AG fell short of analysts' expectations.

Energy stocks were also weaker as oil prices fell on continued concerns about global growth (http://www.marketwatch.com/story/oil-slumps-on-renewed-global-growth-fears-2019-01-22), most recently sparked by a warning from the International Monetary Fund and Chinese data reported Monday.

What are markets doing?

The U.K.'s FTSE 100 lost 0.6% to 6,929.30, after remaining mostly unchanged on Monday, when U.S. markets were closed for a holiday. U.S. stock futures were weaker (http://www.marketwatch.com/story/dow-futures-drop-nearly-200-points-as-growth-trade-worries-fester-2019-01-22) on Tuesday.

The British pound rose slightly to $1.2898 from $1.2891, late on Monday in New York. Russ Mould, investment director at AJ Bell put sterling's weak performance down to the "latest twists and turns in the Brexit saga".

What's driving the market?

After China posted the slowest annual pace of annual growth-- (http://www.marketwatch.com/story/china-posts-slowest-economic-growth-since-1990-2019-01-20)6.6%--since 1990, President Xi Jinping reportedly convened a meeting of high-level Communist Party officials (https://www.abc.net.au/news/2019-01-22/xi-jingping-china-president-warns-black-swans-grey-rhinos/10736442), urging them to be alert over "black swan" and "gray rhino" financial events in face of an economic slowdown. Trade tensions are partly to blame for the weak data.

In the U.K., Jeremy Corbyn, leader of the opposition Labour Party, has backed a plan (http://www.marketwatch.com/story/brexit-brief-labour-leader-backs-possible-referendum-rerun-2019-01-22)to give politicians a vote on whether the country should hold a second referendum on its membership of the European Union. Corbyn's party wants to give parliament the chance to vote on options to end the Brexit stalemate in Westminster.

UBS Group said Tuesday that it swung to a profit in the fourth quarter of the year but missed analysts' expectations (http://www.marketwatch.com/story/ubs-swings-to-profit-but-misses-expectations-2019-01-22-14854552). The Swiss bank reported a net profit of $696 million for the quarter compared with a loss of $2.42 billion a year earlier, when it took hit from the U.S. tax overhaul of almost $3 billion.

What stocks are active?

U.K. banking stocks were under pressure following the UBS miss. The Royal Bank of Scotland Group PLC (RBS.LN) lost just under 2%, Barclays PLC (BCS) dropped 1.6%, Lloyds Banking Group PLC (LLOY.LN) lost 0.7% and HSBC Holdings PLC (HSBA.LN) fell 1.2%.

Heavyweight BHP Group PLC (BHP.LN) lost almost 2% after the miner released its operating review for the half year, which recorded weaker quarterly production of commodities (http://www.marketwatch.com/story/bhp-output-falls-forecasts-productivity-hit-2019-01-22) including iron ore and petroleum. Rio Tinto PLC (RIO.LN) also lost just under 2%.

Royal Dutch Shell PLC (RDSA.LN) dropped 2% after Morgan Stanley downgraded the stock to underweight and as oil prices declined.

Budget airline EasyJet PLC (EZJ.LN) surged 5.8%, despite announcing that its revenue per seat had dropped in its first quarter (http://www.marketwatch.com/story/easyjet-posts-revenue-drop-sees-decline-ahead-2019-01-22) on Tuesday. However, total revenue for the three-month period rose to 1.30 billion pounds from 1.14 billion pounds. Bernstein Research described revenue per seat as better than expected and guidance on a decline in revenue per seat for the first half of the year is in line with its forecasts. Hargreaves Lansdown said EasyJet remains in on course to hit full-year targets.

(END) Dow Jones Newswires

January 22, 2019 07:23 ET (12:23 GMT)

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