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London open: Stocks decline ahead of Carney’s testimony, US GDP
UK stocks declined on Tuesday morning ahead of Bank of England governor Mark Carney’s testimony to the Treasury Select Committee. Carney and BoE chief economist Andy Haldane will be questioned by the Committee at 1000 GMT on the central bank’s monetary policy stance.
Questions are “likely to be focused on the central bank’s recently slashed outlook for the UK economy”, said Connor Campbell, financial analyst at Spreadex.
Markets will be watching closely to see whether the BoE officials drop any hints on the timing of an interest rate hike.
Shortly after, the Confederation of British Industry releases its retail sales figures for November at 1100 GMT.
In the US, economic growth data at 1330 GMT will be in focus amid speculation that there may be a strong case for raising interest rates in December. Gross domestic product is expected to be revised to an annualised 2.1% in the third quarter, up from a previous estimate 1.5%.
“A smaller drag in inventory accumulation should account for most of the upward revision to GDP. Consumer spending growth may be revised higher to 3.3% from 3.2%,” according to HSBC analysts.
The US S&P/Case-Shiller Composite-20 will be closely followed at 1400 GMT and economists have pencilled in a 5.15% year-on-year rise in September following a 5.09% a month earlier.
A report on US consumer confidence is due at 1500 GMT, with analysts predicting an improvement in sentiment in November. The confidence index is forecast to rise to 99.5 from 97.6 in October.
Company-wise, EasyJet shares descended after saying that it will cancel all flights to and from Sharm El Sheikh, Egypt, until 6 January after Islamic State claimed responsibility for bringing down a Russian airliner flying from the region earlier this month.
Fellow travel stocks International Consolidated Airlines and TUI were also on the back foot.
Rolls Royce dipped after saying a “major restructuring” is on the cards as it unveiled the results of new-CEO Warren East’s operational review.
Kingfisher fell after revealing third quarter total sales of £2.7bn were down 2.5% due to currency effects as a strong UK performance was undermined by continued softer trading in France.
Babcock gained after posting 12% growth in underlying revenue for the first half of the year, due to strong growth in its support services division.
Mining stocks turned around the previous day’s slump with Anglo American, Glencore, Randgold Resources, Fresnillo and BHP Billiton all sitting higher.
