FTSE 100 weighed down by Aveva, aero stocks; BP limits losses

(Reuters) -London’s FTSE 100 inched lower in choppy trading on Tuesday, as a fall in aero stocks and industrial software company Aveva Group following its CEO’s exit outweighed gains by BP after an upbeat earnings update.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

The blue-chip index fell 0.1%, with Aveva Group slipping 5.7% to the bottom of index after its Chief Executive Officer Craig Hayman decided to quit.

Aero stocks also declined with Rolls-Royce being the second-biggest drag on the index.

However, losses were checked by a 1.8% gain in BP Plc after its first-quarter profit more than tripled from a year earlier and the oil major said it intended to resume share buybacks in the third quarter.

Its peer Royal Dutch Shell also climbed ahead of its results on April 29. [O/R]

The pharmaceutical and biotechnology index rose with AstraZeneca gaining 1.3%.

Globally, investors were cautious ahead of the U.S. Federal Reserve two-day policy meeting, where the central bank is expected to confirm that it will maintain its easy monetary policy to bolster the economy. [MKTS/GLOB]

“The Federal Reserve (Fed) can’t afford to make any comments that would awaken the Fed hawks at this week’s meeting,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a note.

“But the rising inflation expectations due to the skyrocketing commodity prices and robust growth could titillate the Fed hawks at some point, and shift the attention from robust first-quarter earnings to what would happen to these earnings once the financial conditions start being tightened.”

The FTSE 100 has gained about 7.7% 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 0.3%.

HSBC Holdings added 1.2% after it reported a 79% rise in first-quarter profit, as vaccine rollouts sparked an improved economic outlook.

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