European markets were broadly positive on Tuesday, tracking higher oil prices and a strong finish on Wall Street as German markets reopened following the Whit Monday holiday.
Well-received corporate results and the price of oil near seven-month highs helped the FTSE 100 gain just shy of 1% by mid-morning. Telecom and housing stocks were top performers on the UK benchmark after Vodafone (LON:VOD), Taylor Wimpey (LON:TW) and Land Securities (LON:LAND) exceeded earnings expectations.
The British pound gained against the US dollar and the euro after a telephone poll on the EU referendum showed a substantial lead for the ‘Remain’ campaign. Sterling came off its highs following data showing a surprise slowdown in UK inflation. Annual CPI growth fell to 0.3% against expectations of an unchanged print of 0.5%. Core inflation, which excludes food and energy, dropped to 1.2% from 1.5%. Big price falls in meat and second-hand cars appeared to trump gains in tobacco, education and insurance.
There is some concern that UK house price inflation is slowing in 2016 but housebuilders earnings continue to show 2015 was a great year. Taylor Wimpey shares gained over 5% after it announced a special payout on top of an increase to its ordinary dividend.
Vodafone shares rose after the mobile phone operators “Spring Project” to invest in its network infrastructure helped generate full-year underlying earnings growth.
US stocks look set for a flat open ahead of key inflation data that could set the tone for expectations on the next rate increase from the Federal Reserve. Retailers Home Depot (NYSE:HD) and TJX Companies (NYSE:TJX) report earnings before the open.
USA pre-opening levels
- S&P 500: unchanged at 2,066
- Dow Jones: unchanged at 17,710
- NASDAQ 100: 3 points higher at 4,383
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