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London open: Stocks fall ahead of UK inflation figures
London stocks declined on Tuesday as traders awaited UK inflation figures and the International Monetary Fund’s latest economic forecasts.
The UK consumer price index, released at 0930 BST, is expected to show a 0.4% year-on-year rise in March, compared to 0.3% a month earlier. On the month CPI is projected to increase 0.3% following a 0.2% increase in February. Inflation has remained weak amid low commodities and food prices.
“How both the FTSE and the pound perform this Tuesday will likely be down to the state of the UK’s inflation figures, especially with the Bank of England rate vote later this week,” said Connor Campbell, financial analyst at Spreadex.
The Bank of England, which is targeting 2% inflation, is expected to keep interest rates unchanged when it announces its latest policy decision on Thursday.
Meanwhile, the IMF is expected to cut its economic growth forecasts at 1400 BST amid a slowdown in emerging markets.
Tuesday’s calendar of economic data also includes house prices from the Office for National Statistics at 0930 BST, the US NFIB business optimism survey at 1100 BST and the US monthly budget statement at 1900 BST.
In commodities, oil prices ticked higher ahead of a 17 April meeting between global producers on whether to freeze output. Brent crude rose 0.48% to $43.04 per barrel and West Texas Intermediate gained 0.29% to $40.48 per barrel at 0901 BST.
Among corporate stocks, Asos gained after reporting a better-than-expected rise in half year revenue.
Whitbread dropped after announcing the departure of managing director Christopher Rogers.
Tesco edged lower after agreeing to sell just over half its stake in South East Asia ecommerce marketplace Lazada to China’s giant Alibaba Group for $129m.
Galliford Try advanced as the construction firm said the cost of its exposure to the Edinburgh schools scandal was “not material to the group”.
Astrazeneca was in the red as Goldman Sachs downgraded the company to ‘sell’ from ‘neutral’ and cut the price target to 3,700p from 4,400p, saying the current long-term estimates are overly optimistic.
