LONDON MARKETS: EasyJet, BHP Billiton Propel FTSE 100 Higher Ahead Of Inflation Data

By Sara Sjolin, MarketWatch

Inflation report for June due; pound falls below $1.31

U.K. stocks rose for a second straight day on Wednesday, lifted by strong gains for mining giant BHP Billiton and EasyJet after those companies issued well-received corporate updates.

Later in the morning, attention turns to the release of June inflation data for the U.K., which could further strengthen the case for an August interest rate rise from the Bank of England.

What are markets doing?

The FTSE 100 index added 0.4% to 7,659.61, building on a 0.3% advance from Tuesday.

The pound fell to $1.3085 from, $1.3116 late Tuesday in New York.

What is driving the markets?

The U.K. benchmark was lifted by upbeat second-quarter corporate releases. BHP Billiton PLC (BLT.LN) (BHP.AU)(BHP.AU) shares posted the biggest gain in London, rising 2.9% after the miner reported a rise in iron ore and copper production (http://www.marketwatch.com/story/bhp-billiton-iron-ore-output-rises-copper-jumps-2018-07-18).

Discount airline EasyJet PLC (EZJ.LN) was number two on the FTSE leaderboard, with shares up 2.8% after the discount airline lifted its full-year profit guidance (http://www.marketwatch.com/story/easyjet-lifts-profit-guidance-as-revenue-rises-2018-07-18).

U.K. inflation data

The monthly report on inflation due later could move U.K. stocks and the pound. Consumer prices are forecast to have grown 2.6% in June, up from 2.4% in May. The core inflation number -- which strips out volatile items such as energy and food -- is expected to come in at 2.2%, compared with 2.1%.

"It is the last major data release before the Bank of England meets on 2 August, and inflation needs to surprise significantly for the BOE to change its plans to raise the Bank Rate at the next meeting," strategists at Danske Bank said in a note.

The Bank of England is widely expected to hike interest rates at its meeting in early August in an effort to curb inflation that remains stuck above the bank's 2% target.

The inflation report is expected to come out at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.

Other stock movers

Shares of Smiths Group PLC (SMIN.LN) slumped 6.7% after engineering company issued a revenue warning for its medical division (http://www.marketwatch.com/story/smiths-warns-on-medical-revenue-returns-to-growth-2018-07-18).

Severn Trent PLC (SVT.LN) lost 2% after the water utility company reported a drop in fiscal 2018 pretax profit (http://www.marketwatch.com/story/severn-trent-profit-falls-in-2018-on-costs-2018-05-23).

(END) Dow Jones Newswires

July 18, 2018 04:11 ET (08:11 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.