HSBC Share Price: Q1 Profits Skyrocket Off the Back of Higher Interest Rates

HSBC share price has been in the green for two consecutive days, erasing losses from its previous trading session. The British banking stock has jumped nearly 6% in the past week and more than 3% in the past two days despite banking fears. At the time of writing, the HSBA stock was trading higher at 598.5p.

HSBC Outperforms

HSBC share price has staged a strong comeback in the past few weeks, wiping out almost all its losses incurred during the banking fiasco in March. Even so, the stock remains 8.45% below its highest point this year.

Earlier on Tuesday, HBSC reported stronger-than-expected earnings for the first quarter against the backdrop of the global banking debacle, following the collapse of Signature Bank and Silvergate Capital. According to HSBC Holdings, its quarterly profits more than tripled in the March quarter as rising global interest rates buoyed the lender’s income, helping it pay its first quarterly dividend since 2019.

HSBC, Europe’s largest bank, announced a pre-tax profit of $12.9 billion in the March quarter, up from $4.2 billion a year earlier and ahead of analysts’ estimates of $8.64 billion. The bank’s headline profit was boosted by a reversal of a $2 billion impairment it took against the planned sale of its French business.

HSBC announced a $0.10 per share dividend, its first quarterly dividend since 2019 on the back of shareholders’ calls to the bank to increase its dividend payout. The British lender also flagged the first of a new cycle of buybacks of up to $2 billion.

Like most European banks, HSBC reported an outflow of deposits in the first quarter. Despite the outstanding profits, HSBC did not raise its key performance target, which analysts highly anticipated.

HSBC Share Price Outlook

HSBC share price has been on an upside correction for the past few days, ahead of the US Federal Reserve’s interest rate decision. The banking stock has managed to move above the 25-day and 50-day moving averages, as well as the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has ticked higher and slightly hovers below the overbought zone.

As such, I expect the HSBA stock price to continue moving higher, extending the upside trajectory. A move past the resistance at 614p will have buyers eyeing this year’s high at 654p. On the flip side, a move below the 50 DMA at 582p will invalidate my bullish thesis.

HSBA Price Chart

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