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London open: Stocks rise ahead of BoE testimony
London stocks edged higher on Tuesday ahead of a Parliamentary testimony from Bank of England officials including governor Mark Carney.
Carney and fellow Monetary Policy Committee members Ben Broadbent, Martin Weale and Gertjan Vlieghe will be questioned about the latest Quarterly Inflation Report before the Treasury Select Committee at 1000 BST.
“MP’s are likely to want to question Mr Vlieghe about his recent remarks that he could envisage a scenario where we might see further rate reductions if the economy continued to slow,” said Michael Hewson, chief market analyst at CMC Markets.
The MPC’s assessment of the impact of a vote to leave the European Union in the 23 June referendum will also likely be in focus.
It follows a stark warning on Brexit by the Treasury on Monday when Chancellor George Osborne said a vote to leave the EU could result in a year-long recession.
Meanwhile, the UK’s latest borrowing numbers for April will be released at 0930 BST, which is expected to show a slowdown to £5.8bn from £4.2bn the previous month.
In the eurozone, German gross domestic product in the first quarter was confirmed at 0.7% growth compared with 0.3% in the final quarter of last year. Destatis said positive contributions came mainly from domestic demand, which helped to offset weaker trade.
Still to come, investors will eye the release of the German ZEW survey at 1000 BST and US new home sales at 1500 BST.
In commodities, oil prices were in the red as the dollar gained some ground. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies. Brent crude fell 0.77% to $47.99 per barrel and West Texas Intermediate dropped 0.56% to $47.81 per barrel at 0900 BST.
On the company front, DIY retailer Kingfisher was a high riser after reporting a solid start to the year, with 6.2% like-for-like growth in B&Q and Screwfix stores in the UK and Ireland contributing to 3.6% group growth to £2.7bn.
Utility company Severn Trent was also in the black as it cut its dividend but posted a rise full-year profit.
Old Mutual edged up after confirming that it has received approaches from third parties to acquire its 66% stake in OM Asset Management.
Homeserve gained as the repair and insurance company posted a rise in profit for the year to the end of March as revenue and customer numbers grew.
Card Factory slumped as a it reported lower sales growth for the first quarter due to weak consumer confidence.
