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* BP drops despite surge in quarterly profit
* Aveva slides as CEO Craig Hayman quits
* HSBC shares rise after results, lifts banks index
* FTSE 100 down 0.3%, FTSE 250 off 0.6% (Updates to market close)
April 27 (Reuters) - London’s FTSE 100 dropped on Tuesday, 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%, with industrial software company Aveva Group’s 5.4% 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%, 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% jump after it beat quarterly profit forecasts and released $400 million it had set aside to cover bad loans caused by the pandemic.
The broader banks index added about 2.4%.
The fall in London stocks was in line with its European peers, as investors looked to cues from the U.S. Federal Reserve on bond purchases and inflation while awaiting earnings from mega-cap U.S. technology companies this week.
“We’re now in a very busy week for companies updating on earnings and trading in the UK and U.S., 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% 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%.
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%.
Its peer Royal Dutch Shell also fell ahead of its results on April 29. (Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Peter Graff)