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London open: Stocks decline as oil prices fall
UK stocks declined on Tuesday as oil prices continued to fall and mining stocks reversed the previous session’s gains.
Oil prices extended losses from Monday as the Organization of the Petroleum Exporting Countries said that global demand for its crude would be less than previously thought in 2016 as supply from rivals continues to ramp up.
At 0855 GMT Brent crude fell 2.14% to $38.70 per barrel and West Texas Intermediate declined 2.19% to $36.38 per barrel.
Meanwhile, the Bank of Japan left its monetary policy unchanged despite worsening conditions in the world’s third largest economy. The central bank also downgraded its view of the economy and inflation expectations.
“Although it was broadly expected that the central bank remains on standby following the souring mood from the negative interest rate cut on the 29th, the ongoing global woes which have exposed Japan to downside risk have left the central bank under immense pressure to take action,” said FXTM research analyst Lukman Otunuga.
Investors are now awaiting the Federal Reserve’s policy decision on Wednesday. The central bank is expected to stand pat on interest rates amid worries about a global economic slowdown.
The Bank of England is also widely expected to keep policy unchanged when it announces its latest measures on Thursday.
Still to come on Tuesday’s calendar, Eurozone employment figures are due at 1000 GMT and US retail sales data will be released at 1230 GMT.
In company news, shares in Antofagasta slid after the miner revealed earnings before interest, tax, depreciation and amortisation plunged 58% to $890.7m due mainly to lower copper prices.
Balfour Beatty edged higher as it narrowed its full year losses and announced plans to reinstate a dividend later this year.
Evraz was in the red as the steelmaker saw earnings fall by more than a third in its 2015 results.
Legal & General declined after reporting a capital position below some expectations in its full year.
Automotive distributor and retailer Inchcape gained as it posted a small rise in full year pre-tax profit as revenue edged higher amid strong UK sales.
