LONDON, April 28 ― London's FTSE 100 dropped yesterday, as export-heavy companies took a hit from a perky pound, overshadowing a rise in bank shares following HSBC's quarterly profit beat.
The blue-chip index shed 0.3 per cent, with industrial software company Aveva Group's 5.4 per cent slump leading declines on the index after its Chief Executive Officer Craig Hayman said he was stepping down.
The pharmaceutical and biotechnology index dropped 2.3 per cent, the most among sectors, while international companies that take a hit to their profits from a rise in local currency dropped, with British American Tobacco, Unilever, Reckitt Benckiser down marginally.
However, losses were limited by HSBC Holdings' 4 per cent jump after it beat quarterly profit forecasts and released US$400 million it had set aside to cover bad loans caused by the pandemic.
The broader banks index added about 2.4 per cent.
The fall in London stocks was in line with its European peers, as investors looked to cues from the US Federal Reserve on bond purchases and inflation while awaiting earnings from mega-cap US technology companies this week.
“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,” said Russ Mould, investment director at AJ Bell.
“This could result in heightened trading volumes and mean markets are principally driven this week by company fundamentals rather than politics and macroeconomics.”
The FTSE 100 has gained about 7.5 per cent year-to-date on optimism that speedy Covid-19 vaccinations and constant government policy support would drive a stronger economic recovery.
However, concerns over the resurgence of Covid-19 cases in parts of Asia and prospects of rising inflation as economies reopen have dented sentiment.
The domestically focussed mid-cap FTSE 250 index slipped 0.6 per cent.
Oil major BP Plc's first-quarter profit more than tripled from a year earlier and the company said it intended to resume share buybacks in the third quarter. Its shares, however, slipped 0.4 per cent.
Its peer Royal Dutch Shell also fell ahead of its results on April 29. ― Reuters
