London Markets: HSBC and Glencore drag London stocks into the red

A sharp fall in the FTSE 100’s most heavily weighted stock — HSBC — dragged the U.K. index deep into the red on Tuesday.

The index UKX, -0.68% slumped 0.8% to 7375.17, with HSBC out in front with a more than 6% drop after the U.K. banking giant said it may cut 35,000 jobs as it embarks on a plan to scale back operations in Europe and the U.S. That’s as profit fell 53% in 2019 and the bank said it would suspend buybacks over 2020 and 2021.

Also contributing to the slump, shares of heavyweight Glencore PLC GLEN, -3.34% slid over 4% after the multinational commodity trading and mining company said it swung to a loss in 2019 as it wrote down $2.8 billion in assets linked to coal and other assets. That led to losses across the mining sector, with Evraz EVR, -2.40% down over 4% and BHP Group BHP, -1.14%BHP, -0.38% falling 3.4%.

Data showed pay growth in the U.K. slowed at the end of 2019 and productivity flatlined, a fresh indication of economic weakness that has prompted calls for a cut in U.K. interest rates from some Bank of England policy makers.

Also weighing on U.K. stocks was a 0.3% rise in the pound GBPUSD, +0.1307% against the dollar to $1.3044, recovering losses from Monday when leading U.K. diplomat David Frost said the U.K. would not align with the EU over environmental and labor issues because it would defeat the point of Brexit. Many of the biggest companies in the FTSE 100 generate a chunk of their revenue outside of the U.K., so a strong pound makes them less competitive.

London stocks also tracked global equities lower as a warning from Apple AAPL, -2.50% linked to the coronavirus outbreak rattled investors.