FTSE 100 Live: HSBC, Lloyds Weigh as FTSE 100 Dips from Record High, JP Morgan Warns of Market Correction

The FTSE 100 index slipped from its record high on Thursday, dragged lower by declines in banking stocks including HSBC and Lloyds Banking Group, even as miners such as Anglo American and Rio Tinto lent some support.

The blue-chip index fell 0.4% or 34.22 points to 9,514.65, retreating from Wednesday’s record close of 9,548.87. The drop came amid broader caution following warnings from major financial institutions about potential market corrections.

JP Morgan Chief Sounds Caution

JP Morgan CEO Jamie Dimon issued a stark warning, saying he is “far more worried than others” about a possible market correction within the next six months to two years. 

Speaking during a visit to Bournemouth, where the US banking giant is investing £350 million in a new campus, Dimon said that while artificial intelligence (AI) will ultimately prove transformative, many investors could suffer heavy losses along the way.

“The way I look at it is AI is real, and in total it will pay off just like cars and TVs did, but most people involved in them didn’t do well,” Dimon told the BBC. 

HSBC Shares Fall on Buyback Pause

HSBC Holdings shares tumbled nearly 6%, or £65.6 to £1,000.4, after announcing plans to acquire full ownership of Hang Seng Bank. 

HSBC currently holds around 63% of Hang Seng and will pay roughly £10.2 billion for the remaining shares, representing a 30% premium on Wednesday’s price.

While the deal aims to simplify HSBC’s Asian operations, investors reacted negatively to the bank’s decision to pause share buybacks for the next three quarters to preserve capital for the acquisition.

Lloyds Warns of Additional Motor Finance Provision

Lloyds Banking Group dropped 3%, or £1.9 to £84.5, after warning that its motor finance compensation provision could see a “material” upward revision. 

The statement followed the FCA’s consultation paper, which suggested an industry-wide cost of £11 billion to cover redress for mis-sold loans.

Winners and Losers

Mining stocks offset some of the market’s weakness. Anglo American gained 2.76% to £2,980, Rio Tinto rose £91 to £5,138, and Mondi advanced 1.7% to £862.4. 

Meanwhile, Burberry Group climbed £23 to £1,288 after Deutsche Bank upgraded the stock to a “Buy” rating with a £1,500 price target.

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Global and Sector Outlook

Globally, sentiment was mixed. In the US, the S&P 500 and Nasdaq notched new highs on tech-led gains from Nvidia, Tesla, and Netflix, while the Dow Jones closed flat. In Asia, Japan’s Nikkei 225 surged 1.5%, powered by an 11% rally in SoftBank following new AI investment announcements.

With the FTSE 100 coming off record highs and global central banks cautious about stretched valuations, analysts suggest near-term volatility could rise.