Live news: China new home sales post biggest monthly drop in a year

HSBC announced a further share buyback of up to $2bn and reported better than expected pre-tax profits, as rising rates boosted the UK-based lender. 

The bank reported pre-tax profits of $8.8bn in the three months to June, beating analysts’ expectations of $8bn. Chief executive Noel Quinn said it was a “strong first-half performance”.

He added that the bank had “good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control”.

Shares in Country Garden fell as much as 10 per cent on Tuesday after one of China’s most important property developers abruptly abandoned an attempt to raise new funds.

The company, the largest developer in the country by sales last year and a barometer for the sector’s health, decided to cancel the $300mn share placement on Monday night, two sources briefed on the placement said, without providing a reason.

A successful placement would have been a rare example of a new capital markets deal in a real estate sector starved of investment. JPMorgan was the sole bookrunner.

Read more about Country Garden’s aborted share placement here.

Events: German economy minister Robert Habeck speaks about decarbonisation of the country’s power plants and the status of state aid regulations in talks with the European Commission. Poland marks the anniversary of the 1944 Warsaw uprising against Nazi German occupation.

Indicators: Still with Germany, the eurozone’s largest economy is expected to publish jobless data for July, after figures on Monday suggested inflation had eased across the bloc amid signs of a generalised recovery. July figures from the Nationwide house price and British Retail Consortium indices are expected. Despite a worsening outlook for the UK housing market, mortgage approvals rose unexpectedly on Monday.

Results: Investors are paying close attention to how inflation and rising interest rates are affecting consumer behaviour and companies’ bottom lines. Among UK companies reporting are alcoholic drinks giant Diageo, lenders HSBC and Metro Bank and energy major BP, which is expected to post second-quarter pre-tax profits of $6.4bn on revenues of $47.8bn, according to consensus estimates compiled by Refinitiv.

Asian equities rose on Tuesday as investors reacted to measures by Beijing to boost consumption in China and calculated that interest rate increases in the US were coming to an end.

Hong Kong’s Hang Seng index added 1.1 per cent, Japan’s Topix rose 0.6 per cent, South Korea’s Kospi gained 1.3 per cent and China’s CSI 300 advanced 0.4 per cent.

The Asia moves followed gains in the US as investors wagered that the Federal Reserve’s monetary cycle was likely to be finished for this year. Incentives for consumers in China were also cheered. The S&P 500 and Nasdaq Composite rose 0.2 per cent each on Monday.

Sales of new homes in China slumped by the biggest monthly decline in a year in July, according to private-sector data compiled from the country’s top 100 developers, as the indebted property sector comes under renewed pressure.

Sales declined 33.1 per cent in value compared with a year earlier to a total of Rmb350.4bn ($48.9bn), according to data from China Real Estate Information Company. The July slump followed a contraction in June.

Chinese developers were roiled by a wave of defaults last year and the recent slowdown in sales comes as the economy has stagnated despite the unwinding of Covid-19 controls last year.

Events: The Reserve Bank of Australia issues an interest rate decision. Economists at Bank of America and Westpac expect a 25-basis-point rise to 4.35 per cent. The Bank of Japan releases minutes of its June monetary policy meeting. China marks Army Day, the anniversary of the founding of its armed forces in 1927 during the Chinese civil war. Thailand’s financial markets are closed for Asanha Bucha, a Buddhist festival observed on the full moon of the eighth lunar month.

Indicators: It’s a big day for purchasing managers’ indices, as Caixin issues its latest data for China. Japan’s Nikkei publishes the manufacturing PMI for July and S&P Global releases similar figures for India, South Korea, the Philippines, Taiwan and Vietnam. Australia also provides a manufacturing PMI. Indonesia publishes consumer price index figures. Hong Kong announces the latest retail sales data, Japan notes its June unemployment rate and South Korea releases June trade data.

Results: UK-based, Asia-focused HSBC issues first-half earnings, while Japan’s Mitsui & Co, Mitsubishi UFJ Financial Group, Nomura, TDK and Toyota publish first-quarter data. Hong Kong’s Kerry Group provides second-quarter results.

A top Republican donor who helped fund Donald Trump’s past presidential runs has emerged as a top financial supporter of Robert F Kennedy Jr’s longshot White House bid, as conservative cash keeps flowing to Joe Biden’s main challenger for the Democratic nomination.

According to federal filings released on Monday, Timothy Mellon gave $5mn to American Values, the main political action committee, or outside spending group, supporting Kennedy’s White House bid.

Not only are some Republicans drawn to Kennedy’s views questioning vaccinations and US support for Ukraine, but they also see his candidacy as weakening Biden heading into the general election.

President Joe Biden has decided to keep the US Space Command in Colorado, reversing Donald Trump’s plan to move it to Alabama, the Pentagon said on Monday. 

The move comes as the Biden administration has grown increasingly frustrated with Tommy Tuberville, a Republican senator from Alabama, who has blocked the confirmation of dozens of senior military officers to protest the Pentagon’s efforts to protect abortion access in the military.

But even before then, Democratic lawmakers in Colorado had been putting pressure on Biden to overturn Trump’s decision. The move by the current president was heavily criticised by Alabama Republicans as brazenly political and designed to punish a conservative state. 

High demand for summer travel helped car rental company Avis Budget Group exceed Wall Street’s expectations for profit.

Avis earned $436mn in net income in the three months ending in June, beating analysts’ forecasts by 18 per cent. Revenue was slightly below forecasts at $3.1bn, with Wall Street expecting $3.2bn.

Chief executive Joe Ferraro said the Avis team had been able to capitalise on “strong and increasing travel demand” and that “summer travel has continued to be robust with elevated peak period demand and seasonally improved pricing”.

While Avis’s revenue dipped 7 per cent on a per-day basis compared with the year-ago quarter, rental days increased by 4 per cent.

The private equity owners of German sandal maker Birkenstock are considering an initial public offering of the company that may take place as soon as September, according to people familiar with the matter.

If L Catterton decided to go ahead with the listing, Birkenstock could be valued at more than $8bn, the people said.

An exit at that valuation would mark a bumper return for the private equity firm, which is backed by French luxury fashion house LVMH and has invested in consumer brands including Scandinavian fashion company Ganni and fitness company ClassPass.