(Alliance News) -Â The FTSE 100 slipped into the red as Tuesday's session progressed, with Aveva and Whitbread tugging on the blue-chip index and offsetting well-received quarterly results from HSBC and BP.
The mood was cautious, with trade in Europe subdued and New York on course for a limp open, as the US Federal Reserve kicks off its two-day monetary policy meeting.
The Fed's US interest rate decision is due on Wednesday at 1900 BST.
"The Fed...is likely to shuffle forecasts around to reflect the current strong data, without changing its long-term outlook or lowering its guard with regard to Covid-19. And the unemployment rate needs to drop a good bit before they'll even think about it. That could all change by the muddle of summer, but there will be continued caution tomorrow," said Kit Juckes, a strategist at Societe Generale.
London's FTSE 100 index was down 12.81 points, or 0.2%, at 6,950.31 midday Tuesday.
The mid-cap FTSE 250 index was down 102.88 points, or 0.5%, at 22,474.46. The AIM All-Share index was up 0.2% at 1,277.71.
The Cboe UK 100 index was down 0.3% at 691.57. The Cboe 250 was down 0.5% at 20,104.16, and the Cboe Small Companies up 0.1% at 14,500.31.
"BP did its best to lift the FTSE 100, but the index struggled with headwinds from Aveva, where CEO Craig Hayman has quit," said Russ Mould, investment director at AJ Bell.
BP shares were up 1.1% at midday, after the oil major promised share buybacks after getting its net debt below USD35 billion.
The energy giant reported a replacement cost profit for the first quarter of 2021 of USD3.33 billion, swinging from a loss of USD628 million a year ago, while underlying RC profit jumped to USD2.63 billion from USD791 million.
BP ended the period with net debt of USD33.31 billion, well down on the USD51.40 billion reported at the same date a year ago. BP's net debt stood at USD38.9 billion at the end of 2020.
"We generated around USD11 billion of cash inflow in the first quarter, enabling us to reach our USD35 billion net debt target significantly ahead of plan and move to the second phase of our financial frame. We are starting buybacks in the second quarter with the intent to offset the full-year dilution from employee share schemes," said Chief Financial Officer Murray Auchincloss.
BP plans to buyback USD500 million of shares in the second quarter.
HSBC also was doing its bit for the FTSE 100. The London-headquartered but Asia-focused lender rose 2.5% after posting a sharp rise in first quarter profit.
Pretax profit in the three months to March 31 improved 79% to USD5.78 billion from USD3.23 billion a year before. In the first quarter, HSBC's expected credit losses came out as a net release of USD400 million compared to the mammoth USD3.0 billion charge seen a year before.
The net release in provisions primarily reflected an improvement in the economic outlook from 2020, the bank explained.
BP and HSBC were offset by share price declines for Aveva and Whitbread.
Aveva tumbled 4.7% on news that its chief executive will be departing.
The Cambridge, England-based engineering and industrial software firm said Chief Executive Craig Hayman has decided to return to the US for personal reasons and will leave after the annual general meeting in July. His employment will cease at the end of January 2022.
During his three-year tenure, Hayman has overseen the integration that followed Aveva's combination with the industrial software business of Schneider Electric. The French firm has a 60.2% stake in Aveva following their merger of software businesses back in 2018.
Peter Herweck will be seconded from Schneider Electric on request of the Aveva to the role of CEO, effective May 1. Herweck currently is executive vice president of Industrial Automation at Schneider.
Hospitality firm Whitbread fell 2.9% after posting a GBP1 billion annual loss. Revenue for the financial year that ended February 25 plummeted 72% to GBP589.4 million from GBP2.07 billion the year before, sending Whitbread to a pretax loss of GBP1.01 billion from a profit of GBP280.0 million.
However Whitbread said it anticipates "strong" leisure demand during the summer in coastal and other tourist locations, which represent around 15% of its hotel estate. It is eyeing a boost from 'staycations' in the UK this summer.
After a busy morning for UK earnings, focus turns to the US where Alphabet, Microsoft and Visa report later on Tuesday.
AJ Bell's Mould commented: "We're now in a very busy week for companies updating on earnings and trading in the UK and US, which means investors are likely to be rearranging their portfolios in reaction to the news. This could result in heightened trading volumes and mean markets are principally driven this week by company fundamentals rather than politics and macroeconomics."
Wall Street is on course for a mildly higher start, with the Dow Jones called flat but both the S&P 500 and Nasdaq Composite pointed up 0.1%.
Tesla shares look set to slump when the bell rings Tuesday, as they slipped 2.3% in pre-market trade in New York.
After the market close on Monday, the electric car maker posted revenue of USD10.39 billion in the first quarter of 2021, up 74% from USD5.99 billion a year ago. First quarter diluted GAAP earnings per share attributable to common stockholders was USD0.39, from USD0.02 last year.
However, AJ Bell's Mould said investors were "flabbergasted that cash generation is coming from the sale of regulatory credits and profit driven by trading bitcoin, rather than its principal activity of making and selling electric vehicles."
In mainland Europe, the CAC 40 in Paris was down 0.1%, while the DAX 30 in Frankfurt was down 0.3% on Tuesday.
Sterling was quoted at USD1.3905 midday Tuesday, up on USD1.3885 at the London equities close on Monday. The euro traded at USD1.2073, flat on USD1.2075 late Monday.
The dollar was quoted at JPY108.32, higher versus JPY108.18 late Monday in London.
Gold was quoted at USD1,779.90 an ounce on Tuesday, rising from USD1,777.60 on Monday. Brent oil was trading at USD66.01 a barrel, higher than USD65.50 late Monday
By Lucy Heming;Â lucyheming@alliancenews.com
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