London pre-open: Stocks to rise ahead of CPI data

16th Sep 2014 07:39

London-listed stocks are expected to open broadly higher on Tuesday as investors gear up for the latest UK inflation reading, German investor confidence and, later in the week, the Scottish referendum and a meeting of the Federal Open Market Committee (FOMC).City sources predict the FTSE 100 will open around nine points higher than yesterday's close of 6,804.21.That comes after US stocks finished in a mixed fashion the previous evening, with the Nasdaq falling sharply after a sell-off in technology shares, as investors showed their nerves ahead of the FOMC meeting.The main event on Tuesday's agenda is UK inflation data, which is expected to show that price rises eased in August, with forecasts predicting that consumer prices may have risen by 1.5% year-on-year, compared to 1.6% a month earlier, moving further away from the Bank of England’s (BoE) 2% target."The consumer price index, probably the most important data point for UK monetary policy is released today but even a surprise result is probably going to have a fairly short-lived impact on UK markets, just because nothing compares in importance to the Scottish referendum result on Friday," noted CMC market analyst Jasper Lawler."The UK August inflation rate is likely to have slowed to 1.5% year-over-year from 1.6% in July reflecting a drop in energy prices while the core rate is expected to remain at 1.8% with retail and producer prices also released."Meanwhile, the German investor confidence index is forecast to drop for a ninth consecutive month, from 8.5 to 5 in September, thanks to a drop in the European economy and concerns about events in Ukraine.In corporate news, African diamond miner Petra Diamonds has announced it has raised $27.6m through the sale of a rare 122.52-carat blue diamond found at its Cullinana mine in South African in June. "We are pleased to have concluded this arrangement which records an excellent sales value for the rough stone, and also gives Petra exposure to the uplift in value post beneficiation," said chief executive Johan Dippenaar.Online and catalogue fashion retailer N Brown Group saw first-half group revenues fall 0.6%, or 0.5% in like-for-like terms, as planned phasing adjustments to its Simply Be & JD Williams fashion ranges affected sales. Nevertheless, the company remains on track to deliver its year-end forecasts.Thomas Cook said it was offsetting continuing price softness in the travel industry with its cost-cutting regime, with the fourth quarter ahead of last year and the full year expected to show "material improvement over last year".