FTSE 100 bounces back as housebuilders rally
The FTSE 100 Index closed up 46.08 points to 7115.98.
London’s top-flight index rebounded on Monday as investors cheered British housebuilders following the Prime Minister’s pledge to speed up the construction of new homes.
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The FTSE 100 Index closed up 46.08 points to 7115.98, with Theresa May warning developers that she would “not rule out any options” to tackle delays in homebuilding.
Mrs May, who called for a “great national effort” to get Britain building, said her goal was getting “the right homes in the right places” as she set out a shake-up of planning laws.
Persimmon was among the biggest risers, pushing 58p higher to 2,642p, while Barratt Developments and Taylor Wimpey rose 7p to 539.4p and 1.5p to 187.5p respectively.
Across Europe, Germany’s Dax was up 1.5% and the Cac 40 in France lifted by 0.6%.
On the currency markets, the pound was 0.4% ahead against the US dollar at $1.38 as traders welcomed a bright update from Britain’s powerhouse services sector.
The IHS Markit/CIPS UK Services purchasing managers’ index (PMI) hit 54.5 last month, up from 53.0 in January and above economists’ expectations of 53.2.
A reading above 50 indicates growth.
Despite a stronger performance from services, economists expect the UK economy to grow by 0.4% for the first three months of this year, in line with the final quarter of 2017.
The sector, which accounts for around 80% of UK economic growth, was bolstered by easing cost pressures and the fastest jump in new work since May last year.
Versus the euro, sterling rose 0.4% to 1.123 euro.
Brent crude was up 1.9% to $65.74 a barrel as the price recovered from concerns last week over the global supply glut.
In UK stocks, Ultra Electronics was given a rocky ride by investors after the defence firm’s tie-up with America’s Sparton was torpedoed by competition concerns.
The group was down 146p to 1,333p on the second tier, with the two firms “mutually terminating” the deal following fears raised by the US Department of Justice.
Ultra said it will now push through a £134 million share buy-back to return equity it raised from investors to secure the deal.
The disappointment was compounded by lacklustre annual results from Ultra, with underlying pre-tax profits sinking 8% to £110 million.
On the FTSE small cap index, the publisher of the Daily Mirror newspaper rose more than 2% as a cost-cutting drive ensured profits continued to climb.
Pre-tax profits at Trinity Mirror grew from £76.5 million to £81.9 million in 2017, while revenue fell 12.6% to £623.2 million on the back of declining print advertising sales.
Print advertising revenue fell by 24.9% in the period, or 19.3% on a like-for-like basis.
Classified advertising also came under pressure, Trinity added, with revenue falling by 25.1% as it was dragged down by declines in recruitment and property.
As part of its update, Trinity also said it would change its name to Reach, which it said more accurately reflects the evolution of the company following its deal to buy the Daily Express.
Shares were up 2p to 77.5p.
The biggest risers on the FTSE 100 Index were Smurfit Kappa up 112p to 2,542p, Smith DS up 19p to 478.8p, CRH up 62p to 2,461p, Antofagasta up 20.2p to 862.8p.
The biggest fallers were Rentokil down 11.5p to 261p, Evraz down 7.2p to 437.1p, Sky down 18.5p to 1,355p, Standard Life Aberdeen down 3.9p to 362.3p.