HSBC share price: 3 things to look out for in its Q1 results

HSBC will be looking to impress its investors after the bank ended 2018 on a high, with it scheduled to announce its Q1 earnings on Friday.

However, despite a relatively strong performance last year the bank’s share price has been volatile, with investors fretting over the lender’s exposure cross-border activity amid a myriad of economic headwinds.

Investors skittish over HSBC performance amid challenging banking environment

HSBC managed to record strong growth in 2018 despite the banking sector bogged down by a myriad of macroeconomic headwinds, with Brexit, trade disputes between the US and China and a slowing global economy.

In fact, the lender saw its revenue and pre-tax profit rise by 5% and 16% respectively last year.

The bank will be looking to reassure investors with a strong start to the new year in its upcoming Q1 results, but lender is will have to do so in a year plagued by the same deluge of economic and political challenges.

HSBC stock looks to regain lost ground

HSBC’s share price, however, has fluctuated significantly, with the bank’s stock losing more than 20% last year from a high of £7.91 back in January to £6.00 in late-October.

Since then, the lender’s share price has regained some of its losses, with the stock rallying more than 8% over the last month, sitting at £6.60 levels as of Thursday 2:15pm GMT, but there is still a lot of work to do in 2019 if the bank is to claw back the ground it has lost.

HSBC banks on Chinese growth

In a bid to recoup its losses HSBC continues to invest in high-growth markets like Asia, with the continent accounting for a significant portion of its revenue and profit growth last year. The lender is banking on the region to propel it forward this year, with China’s belt and road infrastructure plans key to offsetting sluggish growth in Europe.

However, cracks have begun to show in China’s economy, but a recent round of government stimulus has helped stabilise the situation.

In fact, the International Monetary Fund (IMF) downgraded its economic forecasts for every major economy this year except for China, with the organisation predicting a 6.3% rise in GDP, up from an earlier mark up of 6.2%.

Meanwhile, the ongoing trade dispute between the US and China that plagued markets in 2018 appears to be nearing its conclusion, with investors growing increasingly optimistic about a deal being struck in the near-term.

An end to the trade war would alleviate a substantial amount of pressure on the global economy and on the banking sector which has suffered at the hand of an economic outlook surrounded by uncertainty.