Stocks in London ended lower on Tuesday, but its blue-chip index outperformed its European counterparts, as investors' attention turned to several central bank interest rate decisions to come.
The FTSE 100 index ended down 44.02 points, or 0.6%, at 7,192.66 on Tuesday. The mid-cap FTSE 250 index ended down 269.00 points, or 1.4%, at 18,528.14. The AIM All-Share index lost 7.96 points, or 0.9%, at 855.32.
The Cboe UK 100 index was down 0.7% at 717.64. The Cboe 250 was down 1.9% at 15,875.18, and the Cboe Small Companies lost 1.6% at 13,382.85.
Financial markets in London were closed on Monday for the funeral of Queen Elizabeth II.
In mainland Europe, the CAC 40 in Paris ended down 1.4%, while the DAX 40 in Frankfurt shed 1.0%.
At the time of the European equities close, stocks in New York were weaker. The Dow Jones Industrial Average was down 1.1%, the S&P 500 was 1.0% lower, while the Nasdaq Composite was 0.4% lower.
Stocks in Europe started the day on the front foot, but an aggressive 100 basis point rate hike from Riksbank of Sweden unnerved investors, which pulled attention back to the US Federal Reserve rate decision tomorrow.
The market largely expects another 75 basis point rate hike.
According to the CME FedWatch Tool, which tracks the latest probability of Fed policy decisions, there is however, an 18% chance it could lift rates by 1%.
The dollar was on the up ahead of the Fed interest rate decision.
Sterling was quoted at $1.1404 late Tuesday, down against $1.1431 at the London equities close on Friday. The euro traded at $0.9989, down from $1.0025 late Friday.
Against the yen, the dollar was quoted at JP¥143.75, higher versus JP¥142.93.
Focus is also on the Bank of England, which is expected to hike by 50 basis points, and the Bank of Japan, which is expected to leave its benchmark rate unchanged. Both announce interest rate decisions on Thursday.
On the London Stock Exchange, Haleon rose 2.3%, the best FTSE 100 performer.
The company's first earnings report since its split from GSK impressed investors.
The Surrey-based company reported a pretax profit of £864 million in the six months that ended June 30, up 17% from £736 million a year ago. Revenue grew by 13% to £5.19 billion from £4.58 billion.
Looking ahead, Haleon said it is well positioned to deliver on its financial guidance this year, with 2022 revenue growth expected between 6% and 8%.
The strong interim performance was a welcome tonic for a stock that has struggled since floating. Shares are down roughly 20% since it listed, with the stock hit by worries related to possible Zantac litigation.
Ocado, meanwhile ended down 8.4%, after HSBC cut the online grocer to 'reduce' from 'hold'.
Melrose shares fell 4.8%. Shares have fallen over 15% since the industrial turnaround specialist earlier in September announced plans to separate GKN Automotive and GKN Powder Metallurgy.
A trio of poorly-received updates from magazine publisher Future, greeting cards and gifting company Moonpig and investment platform IntegraFin hit the FTSE 250 Index.
Future fell 16% after it confirmed that Chief Executive Zillah Byng-Thorne plans to step down by the end of 2023, less than a week after Trustpilot hired her as its new deputy chair.
Moonpig gave back 7.5% as investors fret over the impact of cost-of-living worries.
Moonpig said trading to date remains in line with expectations, however.
Looking ahead, Moonpig said it expects its business to return to pre-Covid seasonality, with 58% to 60% of total revenue for the year is anticipated to arise from the second half. Moonpig's financial year ends April 30.
IntegraFin slid 7.4%. It said the UK tax office has maintained its original decision to remove one of the investment platform's subsidiaries from a value-added tax group.
The company explained HM Revenue & Customs upheld a decision to terminate subsidiary Integrated Application Development Pty Ltd's membership in a UK VAT group. IntegraFin had requested a second review of HMRC's decision.
The verdict was the same, and IAD is now subject to reverse-charge value-added tax. However, the company now plans to field an appeal at a first-tier tribunal.
HMRC first imposed its decision in January 2020, terminating the membership of IAD with effect from July 16, 2016.
It means IntegraFin must pay HM Revenue & Customs roughly £10 million. It said it will pay £8.0 million in respect to VAT for the period to July 4, 2016 and September 30, 2021.
It will also pay £1.8 million in respect to VAT due for the financial year ending September 30, 2022.
Elsewhere in London, Ethernity Networks jumped 52% after inking a follow-on contract with an existing customer worth $4.6 million.
The new contract brings the total value of contracts signed with the unnamed customer to $7.6 million.
Brent oil was trading at $90.82 a barrel at the time of the London equities close, down from $92.24 late Friday. Gold was quoted at $1,664.71 an ounce, down from $1,677.01.
Wednesday's economic calendar has the Fed's interest rate decision as well as the central bank's economic projections at 1900 BST.
The local corporate calendar has half-year results from motor dealer Pendragon, ten-pin bowling operator Ten Entertainment and advertising agency S4 Capital.
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