London pre-open: Stocks seen touch weaker as investors eye data, Carney speech
Stocks in London were set for a slightly weaker open on Tuesday as investors awaited some data and a speech by Bank of England governor Mark Carney.
The FTSE 100 was called to open eight points lower than Monday’s close at 7,292.
Public sector net borrowing is at 0930 GMT, while Carney is due to address the Treasury Select Committee at 1000 GMT on the contents of the most recent Inflation Report.
Flash purchasing managers’ index readings for the eurozone are due at 0900 GMT.
CMC Markets’ Michael Hewson said: “The comments of Bank of England governor Mark Carney are likely to be scrutinised today when he testifies to MP’s on the contents of the recent quarterly inflation report, when the Bank of England upgraded its growth forecasts but left its inflation forecasts unchanged.
“The governor must have been a touch relieved when last week’s CPI numbers came in below expectations at 1.8%, though he is still likely to face some difficult questions given the growing criticism of the Bank of England’s decision to cut rates in August last year, which it could be argued has amplified the recent sharp rise in inflationary pressures seen in the back half of 2016.
“The fact that the rise in factory gate prices to 20.5% hasn’t filtered down into the headline numbers yet isn’t likely to let him off the hook with respect to some of the Bank’s recent forecasts which have been rather questionable to say the least.”
In corporate news, HSBC threw in an extra £1bn share buyback and offered assurance of maintaining its dividend to try and keep investors as it reported a bigger than expected drop in annual profits.
The largest company on the FTSE 100 delivered a reported profit before tax of $7.1bn that was down 62% on the prior year.
Australian mining giant BHP Billiton more than doubled its interim dividend payout as it reported a massive jump in underlying profits which were underpinned by a recovery in commodity prices and demand from China.
The world's biggest miner said underlying first-half net profit to $3.24bn from $412bn in 2016. A first half dividend of 40 cents was declared, up from 16 cents, a 10 cent increase over policy that links payouts to results.
The dividend would be covered by free cash flow, the company said. It also announced a $2.5bn bond buyback.
Building materials firm Wolseley is to merge its Swiss plumbing and heating business with Walter Meiro, a Swiss heating and ventilation and air conditioning distributor.
If the merger is completed, Wolseley will receive CHF117.8m and a 39.2% stake in the new business.