FTSE makes gains as housing stocks bounce after help-to-buy reports
The FTSE 100 held on to its gains from early trading to close higher, as buoyant housing stocks helped to offset pandemic-related concerns.
Housing firms saw their shares strengthen following reports that the Government is to extend the timeframe of the Help to Buy scheme as construction work was affected by the pandemic, pushing the likes of Taylor Wimpey and Berkeley higher.
Markets elsewhere in Europe were inconsistent as fears over second waves, and wrangling over a US stimulus deal, weighed on sentiment.
London’s top flight closed 24.38 points higher at 6,129.26p at the end of trading on Tuesday.
Connor Campbell, financial analyst at Spreadex, said: The FTSE desperately clung on to an increase despite gains for the pound and a wave of red across its mining stocks.
“The UK index’s white knight was the housing sector, which rallied on the back of news the Government may extend the Help to Buy scheme beyond December.”
Sterling moved to its highest level against the dollar since early March as traders welcomed positive retail statistics from the CBI.
The pound rose 0.5% versus the US dollar at 1.294 and was up 0.67% against the euro at 1.103.
The major European markets nudged marginally lower following a cautious trading day.
The German Dax decreased by 0.03%, while the French Cac moved 0.22% lower.
Across the Atlantic, the Dow Jones dipped as US lawmakers prepared to wrangle over its one trillion dollar stimulus plan.
David Madden, market analyst at CMC Markets UK, said: “Stocks were in the red as traders in the US are preparing themselves for a drawn-out political fight in relation to the stimulus package.”
Mining stocks plunged lower as investors drew back slightly following Monday’s surge in gold and silver prices.
In company news, British Airways owner IAG moved higher despite a major trade union warning it will move towards industrial action “with immediate effect”.
Len McCluskey, general secretary of Unite, claimed the UK airline has published a timetable to “fire and rehire” thousands of workers on August 7. Shares in IAG nevertheless closed 2.95p higher at 189.9p.
Reckitt Benckiser closed higher after it said it expects Covid-19 will permanently increase sales of Dettol and other cleaning products as it looks forward to a better-than-expected 2020.
The consumer goods giant said that sales in its health business, which includes Dettol, increased by 9.3% in the first half of the financial year.
Shares closed 80p higher at 7,800p on Tuesday as a result.
High street bakery chain Greggs slipped in value after it said it only sold around 72% of the pasties, drinks and sandwiches last week that it did in the same seven days in 2019.
It saw shares slide by 90p to 1,369p at the close of play.
The price of oil dipped slightly as a result of the generally downbeat mood among traders.
The price of a barrel of Brent crude oil decreased by 0.69% to 43.22 US dollars.
The biggest risers on the FTSE 100 were Pearson, up 31p at 543.2p, Berkeley, up 223p at 4,694p, Barratt, up 24.2p at 541p, and Next, up 170p at 5,262p.
The biggest fallers of the day were GVC, down 16.6p at 714.8p, CRH, down 57p at 2,944p, Spirax-Sarco, down 195p at 10,500p, and WPP, down 10.6p at 592.4p.
