Company updates dominated investor attention early Wednesday, particularly a sudden change of leadership at Aston Martin, but market focus later will switch back to central banks.
The Federal Open Market Committee will conclude its two-day policy meeting on Wednesday and announce its decision at 1900 BST. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 BST.
Following a quarter-point increase in the benchmark lending rate in March, Powell and other US central bankers have said a half-point increase could be announced. It would be the first time since 2000 that the Fed has raised rates by 50 basis points at one meeting.
The Bank of England makes it own policy announcement on Thursday.
The FTSE 100 index was down 26.21 points, or 0.3%, at 7,535.12. The mid-cap FTSE 250 index was down 92.79 points, or 0.5%, at 20,427.42. The AIM All-Share index was down 2.87 points, or 0.3%, at 1,010.65.
The Cboe UK 100 index was down 0.2% at 750.55. The Cboe 250 was down 0.6% at 18,032.77. The Cboe Small Companies was up 0.1% at 15,134.48.
In mainland Europe, the CAC 40 in Paris was down 0.2% and the DAX 40 in Frankfurt was down 0.3%.
In the FTSE 100, Flutter Entertainment was the best performer, up 3.6%, after the gambling firm reported a positive start to 2022.
For the three months that ended March 31, revenue rose 5.4% to £1.57 billion from £1.49 billion in the first quarter last year. Average monthly players increased 15% to 8.9 million from 7.7 million.
In the US, Flutter's FanDuel business delivered another ‘excellent performance’ with 2.4 million customers and revenue of $574 million during the quarter. It remained the number one US sportsbook with a 37% online sports betting share, Flutter said.
The company said it launched its FanDuel sportsbook in New York and Louisiana in January and expanded into Ontario in April. It also beat FanDuel records in the quarter, with Super Bowl Sunday the single biggest day ever for new customers with 1.5 million active customers on the day.
Ladbrokes betting chain owner Entain was the second-best blue-chip stock, up 2.2%, in a positive read-across.
In the FTSE 250, Aston Martin Lagonda was the best performer, up 3.5%. The luxury carmaker said its first-quarter performance was in line with expectations as it confirmed the appointment of a new chief executive.
For the three months ended March 31, revenue was £232.7 million, up 3.7% from £224.4 million the year before. However, its pretax loss was £111.6 million, widened from £42.2 million in the first quarter last year.
The carmaker said the revenue increase was driven by ‘strong pricing dynamics’ throughout its core portfolio and Aston Martin Valkyrie programme deliveries of 14 vehicles.
Looking ahead for 2022, Aston Martin still expects an 8% rise in core volumes and a 50% improvement in adjusted core earnings before interest, tax, depreciation, and amortisation. Promisingly, retail sales outpaced wholesales in the first quarter, the company said.
Aston Martin also confirmed a report by the Financial Times that Chief Executive Officer Tobias Moers will leave the board immediately and the company at the end of July.
The Gaydon, Warwickshire-based firm confirmed the appointment of ex-Ferrari boss Amedeo Felisa as its new CEO, with Executive Chair Lawrence Stroll saying the company needs to ‘enter a new phase of growth and development’.
Moers's dual role of CEO and chief technology officer will be split, with another former Ferrari executive, Roberto Fedeli, brought in to be CTO.
Conversely, JD Wetherspoon was down 2.4% after the pub chain said virus woes have been replaced by ‘considerable pressure on costs’ as a new source of concern.
Wetherspoon reported a 4.0% decrease in sales on a like-for-like basis in its financial third quarter, the 13 weeks that ended April 24. In its financial year to date, like-for-like sales were down 6.2%.
On AIM, boohoo was down 11% after the online fashion retailer said profit slumped and costs soared as it struggled to get to grips with difficulties caused by the pandemic.
Pretax profit for the 12 months to the end of February plunged to £7.8 million from £124.7 million the year before, as distribution costs rose and customer demand fell.
Boohoo expects high costs to persist throughout the rest of this year but said it has a series of cost-cutting initiatives in place to manage the business.
Despite the cost-cutting, prices for products could also rise, with the company only committing to ‘mitigate where possible before passing prices on to consumers’.
Sales were up 14% on the year to £1.98 billion and remain well above pre-pandemic levels, as high streets closed and shoppers turned to online.
Davy Research noted FY23 consensus called for £2.18 billion in revenue, up 9.7%, and adjusted Ebitda of £143 million with a 6.6% margin. This compares to Boohoo's guidance on Wednesday that revenue growth will be low-single digits and adjusted Ebitda margins are expected to be between 4% and 7%.
Rival fashion retailers ASOS and Quiz were down 3.0% and 4.5% respectively in a negative read-across.
The dollar was higher ahead of the Fed decision. The pound was quoted at $1.2500 early Wednesday, down from $1.2511 at the London equities close Tuesday.
The euro was priced at $1.0520, lower against $1.0535. Against the yen, the dollar was trading at JP¥130.11, up from JP¥129.97.
In Asia on Wednesday, the Hang Seng index in Hong Kong was down 1.3%. The S&P/ASX 200 in Sydney ended down 0.2%. Financial markets in Tokyo and Shanghai remained closed for public holidays on Wednesday.
Brent oil was trading at $107.65 a barrel Wednesday morning, higher against $106.12 late Tuesday. Gold stood at $1,871.45 an ounce, down slightly from $1,873.30.
Wednesday's economic calendar has PMIs due from the eurozone at 0900 BST and the US at 1445 BST.
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