FTSE 100 Falls as HSBC Slump Drags UK Banks Lower Ahead of Budget

London: Britain’s benchmark FTSE 100 index fell on Tuesday, weighed down by a sharp drop in HSBC shares after the bank’s quarterly revenue came in below expectations. Investors also stayed cautious ahead of the government’s budget and amid higher oil prices.

The blue-chip index was down 0.76 percent at 10,685.18 points by 0949 GMT and was heading for its largest one-day fall in about a month. The domestically focused midcap FTSE 250 index rose 0.16 percent.

HSBC Leads Bank Sell-Off

HSBC shares fell about 7 percent, their steepest one-day percentage drop since April 2025. Because the bank carries a heavy weighting in the index, its decline accounted for a large share of the FTSE 100’s losses.

HSBC reported third-quarter pre-tax profit of $9.6 billion, up 32 percent from a year earlier but below the $10.1 billion it posted in the second quarter. Its core capital ratio of 13.9 percent was below its target range of 14 to 14.5 percent. The bank also announced a new $1 billion share buyback, which it expects to complete before the end of 2026, and kept its quarterly dividend at $0.10 per share. Its shares had already fallen sharply in Hong Kong before the London market opened.

Other major UK lenders followed HSBC lower, pushing the banking index down.

Reckitt Also Weighs

Consumer goods group Reckitt was among the biggest fallers, dropping more than 6 percent after its third-quarter update. The company reported growth in core like-for-like revenue, but sales in North America declined. Chief Executive Kris Licht said performance in that region had fallen short of expectations, citing temporary manufacturing constraints.

Caution Before the Budget

Market sentiment was also held back by caution ahead of the government’s Autumn Budget, due on Wednesday, with investors watching for possible tax measures that could affect the banking sector and the wider economy. Elevated oil prices and ongoing geopolitical uncertainty added to the cautious mood.

Elsewhere in Europe, shares also edged lower, with Germany’s DAX and France’s CAC 40 trading slightly down.