Stocks were trading slightly lower in early trading despite better-than-expected results out of BP and HSBC.
Restraining risk appetite, investors were waiting on the US Federal Reserve’s latest policy guidance with the central bank’s two-day policy meeting set to get underway later in the day.
“What looks like a holding pattern across most major stock markets seems set to continue, investors so far shrugging off the widening signs of inflation in prices and earnings call commentary. For now it looks like they are content to believe the central banks that inflation will be transitory,” said IG chief market analyst, Chris Beauchamp.
“US futures have barely moved all morning too, but that could change once Microsoft and Alphabet release their figures tonight. While tomorrow and Thursday are busier in terms of heavyweight data, today is very much a holding pattern kind of session, but the ongoing bullish tone to US trading seems set to remain with us.”
As of 1201 BST, London’s top-flight index was off by 0.18% at 6,950.40, while the second-tier index was lower by 0.56% to 22,450.16.
Also dampening sentiment, US carmaker Tesla’s shares were down by 2.37% in the US premarket after reporting stronger-than-expected quarterly profits, albeit boosted by exceptionals, including the sale of $780m of regulatory credits and $101m of Bitcoin.
On the economic side of things, the Confederation of British Industry’s Distributive Trades Index jumped from -45 in March to +20 in April, above the consensus +10.
Stateside, the main risk event of the session was expected to be the US Treasury’s auction of seven-year debt, with Microsoft set to follow with its quarterly results after the close of trading.
BP to buy back shares, HSBC beats
British energy company BP on Tuesday reported better-than-expected first quarter profits on the back of higher oil prices as it hit its debt reduction target early and said it would resume share buybacks in the second quarter to the tune of $500m. BP’s first-quarter underlying replacement cost profit, the company’s measure of net profit, came in at $2.6bn compared with a $115m in the final quarter of 2020 and $791m a year earlier. Analysts had expected a first-quarter profit of $1.4bn.
HSBC saw first quarter profits more than double versus the year ago period, boosted by a $400m reversal in its credit losses, profits across all major divisions, and with its European and US operations back in the black. For the three months to 31 March, the lender posted adjusted pre-tax profits of $6.4bn. That compared positively to the $4.3bn anticipated by the analyst consensus.
IWG said occupancy at its serviced offices “stabilised” and then “improved modestly” towards the end of the first quarter. Yet over the three months to 31 March, open centre revenues were down 16.1% to £523.1m and pre-2020 sales fell 20.1% to £496.1m at constant currencies, with the firm pointing out that the year ago quarter had seen the strongest start to a year ever. The reverse was true of the latest three-month stretch, which IWG described as its “most challenging” ever. However, IWG predicted that the first quarter marked an inflection point and that the “positive momentum” would continue throughout the next quarter.
Software firm Aveva reported double-digit revenue growth during for second half of its financial year. The company said that its strong showing on the topline over the past six months had resulted in full-year revenues being flat year-on-year, on a standalone organic constant currency basis. That overall performance reflected disruptions related to the Covid-19 pandemic. The FTSE 100-listed group also noted that it had “responded flexibly” to the challenges posed by Covid-19, growing combined pro forma revenue for the enlarged group by “a low single-digit percentage” on an organic constant currency basis, while achieving strong growth in subscription revenues and increasing operating margins.
Halma acquired North Carolina-based PeriGen, a provider of artificial intelligence software with an automated early warning platform during labour. The FTSE 100 engineer said the cash consideration for PeriGen was $58m (£42m) on a debt free basis. The transaction was to be funded from Halma’s existing facilities. It said PeriGen’s unaudited revenue for the year ended 31 March was about $20m, with return on sales slightly above Halma’s target range of between 18% and 22%.
Market Movers
FTSE 100 (UKX) 6,950.40 -0.18%
FTSE 250 (MCX) 22,450.16 -0.56%
techMARK (TASX) 4,354.69 -0.48%
FTSE 100 – Risers
HSBC Holdings (HSBA) 433.05p 2.44%
Experian (EXPN) 2,782.00p 1.38%
BP (BP.) 300.65p 1.38%
AstraZeneca (AZN) 7,619.00p 1.18%
United Utilities Group (UU.) 952.60p 1.02%
Diageo (DGE) 3,247.50p 1.00%
Lloyds Banking Group (LLOY) 43.29p 0.93%
Smith & Nephew (SN.) 1,486.00p 0.81%
Severn Trent (SVT) 2,422.00p 0.67%
NATWEST GROUP PLC ORD 100P (NWG) 199.95p 0.63%
FTSE 100 – Fallers
Aveva Group (AVV) 3,736.00p -4.38%
Rolls-Royce Holdings (RR.) 103.94p -3.60%
Bunzl (BNZL) 2,361.00p -3.55%
Whitbread (WTB) 3,305.00p -3.11%
Next (NXT) 7,878.00p -2.62%
Evraz (EVR) 655.60p -2.27%
WPP (WPP) 946.60p -2.17%
Ashtead Group (AHT) 4,695.00p -2.02%
Fresnillo (FRES) 889.00p -1.96%
Weir Group (WEIR) 1,969.50p -1.77%
FTSE 250 – Risers
TUI AG Reg Shs (DI) (TUI) 431.50p 3.98%
Syncona Limited NPV (SYNC) 231.00p 1.76%
Babcock International Group (BAB) 302.30p 1.51%
Rank Group (RNK) 189.80p 1.39%
Baillie Gifford US Growth Trust (USA) 343.00p 1.18%
Greencore Group (CDI) (GNC) 156.70p 1.10%
IMI (IMI) 1,569.00p 1.10%
Virgin Money UK (VMUK) 194.95p 1.04%
Contour Global (GLO) 204.50p 0.99%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,070.00p 0.98%
FTSE 250 – Fallers
Avon Rubber (AVON) 3,394.00p -3.74%
SSP Group (SSPG) 324.20p -3.57%
Meggitt (MGGT) 469.60p -3.18%
Ascential (ASCL) 343.20p -3.16%
FirstGroup (FGP) 84.00p -3.11%
Ninety One (N91) 242.00p -2.97%
Wood Group (John) (WG.) 265.80p -2.71%
Capita (CPI) 42.65p -2.65%
Marks & Spencer Group (MKS) 154.50p -2.62%
Hammerson (HMSO) 38.75p -2.59%
