HSBC Share Price Takes a Hit On Profit Miss; Set to Cut 35,000 Jobs
HSBC share price has taken a massive hit this Tuesday, as the company reported a profit miss as a result of underperformance in its US and European operations. HSBC share price plunged from yesterday’s close of 590.7 to 554.7 as at the time of writing, as the company reported a 53% fall in annual profits for 2019. It will now suspend buybacks and implement other cost-cutting measures as part of a massive restructuring plan.
Consequently, HSBC has announced that it will axe 35,000 jobs and will take $7.3billion of charges, while also targeting cost reductions of $4.5billion from its underperforming operations.
HSBC share price drop of 5% is the largest the bank has had to endure in 3 years. Its Asian operations, which provides most of the bank’s revenue base, are also facing coronavirus-related headwinds.
There has been no word on whether interim boss Noel Quinn would be appointed to the role of CEO on a substantive basis.
HSBC share price is down 5% in London trading, and the weekly chart shows that the current price level is close to lows last seen on 15 March 2015 and 12 September 2016. So we are looking at multi-year low here.
HSBC share price is also trading in a descending channel and is getting close to challenging the lower border of that channel. A break of the channel line targets the 552.8 support, with 519.6 and 503.7 being further downside targets. The 14 September 2015 low of 478.1, which is also the neckline of the triple bottom of Feb-July 2016, could come into the picture as another support target if previous support areas are taken out.
On the flip side, price recovery requires a bounce from 552.8, which will allow HSBC share price to target the upper channel border once more. 604.0 and 642.2 remain close upside targets.