UK's FTSE 100 edged higher on Tuesday as gains in energy shares offset declines in defence stocks, while investors stayed cautious ahead of economic data that could sway expectations on the path of U.S. and UK interest rates. The blue-chip FTSE 100 (.FTSE), opens new tab rose 0.1% at 8,287.40 points, while the mid-cap FTSE 250 (.FTMC), opens new tab dipped 0.3% at 0716 GMT.
Energy majors Shell (SHEL.L), opens new tab and BP (BP.L), opens new tab rose more than 1% each as crude prices , steadied near recent highs.
Shares of aerospace and defence firms like Melrose Industries (MRON.L), opens new tab, Rolls-Royce (RR.L), opens new tab and Senior PLC (SNR.L), opens new tab fell in the range of 2.6% and 5.9% after European aerospace group Airbus (AIR.PA), opens new tab cut its industrial and financial guidance for the year.
Traders largely refrained from placing big bets ahead of the U.S. personal consumption expenditure data (PCE), due Friday even as they banked on the numbers to show a renewed moderation in inflation.
UK gross domestic product (GDP) is also due this week and could potentially add to Bank of England (BoE) policymakers' confidence for an interest rate cut in August. Comments from BoE officials last week had revived some hopes for an August cut, which were partially tempered by a strong retail sales reading on Friday.
Adding to caution is London's political landscape, with the parliamentary elections on July 4. Investors expect the BoE to refrain from releasing minutes of its meeting ahead of the election.
