U.K. stocks swung between gains and losses Tuesday, a day after pushing into bull-market territory, with investors setting up to hear what Bank of England Governor Mark Carney may say about the future of interest rates.
The FTSE 100 turned up 0.2% to 6,694.12 after spending time in the red.
The blue-chips benchmark on Monday jumped 1.4% to 6,682.86, the highest close since August. That gain left the benchmark up 22% from its 52-week intraday low hit on Feb. 11, according to FactSet data. That put the FTSE 100 in bull-market territory, which is marked by a more than 20% jump from recent lows.
Attention on Tuesday will turn to the BOE chief Mark Carney, who will appear before a Treasury committee to discuss the central bank’s financial stability report. He will appear at 10 a.m. London time, or 5 a.m. Eastern Time.
Financial markets are pricing a more than 70% chance that the central bank will cut its benchmark interest rate to 0.25% from 0.5% when it meets on Thursday.
With the potential for lower borrowing costs, shares of house builders topped the FTSE 100 on Tuesday. Shares of Taylor Wimpey PLC jumped 6.7%, Barratt Developments PLC rose 4.3%, Persimmon PLC picked up 3.9% and Berkeley Group Holdings PLC rose 3.4%.
Bank shares were also gaining ground, with Barclays PLC up 3.7% and Lloyds Banking Group PLC rising 3.4%.
“Carney [has] emphasized the limits of monetary policy in alleviating risks caused by a Brexit and we could see him call upon the government to engage in structural and fiscal reforms to help the economy weather any slowdown, adding pressure to incoming [Prime Minister Theresa] May,” said Ana Thaker, market economist at PhillipCapital UK, in a note.
Prime Minister David Cameron on Monday said he’ll make way for Home Secretary May to succeed him by Wednesday evening.
The pound was pushed up ahead of Carney’s testimony, buying $1.3118 compared with $1.2995 late Monday in New York.
The British currency surged against the Japanese yen GBPJPY, +1.74% as Japanese Prime Minister Shinzo Abe appeared to be moving closer to announcing a new fiscal stimulus package. The pound fetched ¥135.38 versus ¥133.64.
Elsewhere on the FTSE 100, Vodafone PLC shares 2% after a ratings downgrade to neutral from buy at Citi.
Burberry Group PLC shares up 1.2%, adding to their 4.2% rise on Monday as the luxury fashion house named Marco Gobbetti as its new chief executive.
Source: MarketWatch
