- Housebuilders lift markets higher
- US jobs data and ECB action boosting sentiment
- US equities at fresh record highs
- Lloyds prices TSB IPO well below book value
techMARK 2,857.29 +0.20%
FTSE 100 6,875.00 +0.24%
FTSE 250 16,218.36 -0.09%
Stocks saw some slight follow-through buying from last week as investors sentiment continued to be buoyed by Friday´s solid jobs report Stateside and the decisive measures taken by the European Central Bank last Thursday.
The 'bullish' case for global growth prospects was further backed up by the latest Chinese export numbers due out early on in the session. Overseas sales of goods from the Asian giant rose by a slightly better than expected 7% year-on-year in May.
Nevertheless, some analysts were pointing out that Beijing is in fact quite remiss to prop up economic activity too much.
London's benchmark equity index thus ended trading 0.24% higher at 6,875. The FTSE 100 was just a handful of points away from the 14-year closing high of 6,878.49 reached on May 14th.
The strong finish Stateside and a buoyant session for Asian stocks overnight "indicate that the rally still has some more legs in it", according to Jonathan Sudaria, a dealer at Capital Spreads. "It's a reasonably quiet week on the economic calendar front so there's little for traders to get apprehensive about and play it cautious so we could see the bulls stampede," Sudaria said, adding that "the top is probably still some way off".
Government needs to act on house prices, but housing market multifaceted
Closer to home, Lloyds Bank´s latest UK consumer confidence barometer showed that the net balance of people anticipating an increase in interest rates over the next 12 months rose by seven points to 59% in May, the highest reading since June 2011.
However, the lender further pointed out that market interest rate expectations, as measured by the five-year swap rate, continued to be close to 2%, just about where they have been throughout the year-to-date.
Nevertheless, the gauge for consumers' perceptions about their job prospects compared to a year ago rose by three points to 4%, its highest reading since 2004.
Acting as a backdrop, on Friday the International Monetary Fund (IMF) called on the government to begin to lean against the wind as regards house prices in Britain.
However, speaking to the BBC over the weekend IMF Managing Director Christine Lagarde dismissed talk of a "bubble", adding that economists at the Washington-based lender had "admitted" that the market for houses in the UK is "multifaceted". Implicitly that seems to mean that any action ought to be carefully calibrated.
Construction stocks, miners rise
Housebuilders were rising strongly, just days after the government announced measures to boost housing supply in the UK amid rampant house-price inflation. As well, on Monday it was reported that the Chancellor might provide new incentives and make it easier for homebuilders to construct on "brownfield" sites. The measures are expected to be announced in his Mansion House speech, this next Thursday. Crest Nicholson, Barratt Developments and Persimmon were all making decent gains.
Fresnillo and Randgold were among the best performers as precious metal prices increased on the back of better than forecast data on Chinese exports out overnight.
Supermarket rivals Wm Morrison and Tesco were on the rise this morning as both stocks rebounded after some heavy falls last week.
Financials, however, were weak with Lloyds Banking Group leading the decline after confirming an offer price of 220p-290p for its 25% stake in TSB. At the mid-point of the price range, TSB's market capitalisation would be approximately £1.275bn, well below book value of £1.6bn.
Other financial stocks such as St James's Place, Aviva and Aberdeen Asset Management were all trading lower.
Panmure Gordon cut its rating for temporary power and temperature control services firm Aggreko from 'buy' to 'hold', causing shares
to fall this morning. The stock's valuation - trading at 20.2 times 2014 estimated earnings - "looks up with events to us given the limited extent of earnings per share growth", the broker said.
Support services company Carillion was in demand after its 50/50 joint venture with Lafarge Tarmac was selected as one of the contractors on the Midlands Highway Alliance framework.
FTSE 100 - Risers
Barratt Developments (BDEV) 375.90p +2.54%
Sports Direct International (SPD) 825.00p +1.48%
ARM Holdings (ARM) 909.50p +1.39%
Royal Bank of Scotland Group (RBS) 343.20p +1.36%
SABMiller (SAB) 3,277.50p +1.31%
Tesco (TSCO) 294.10p +1.22%
Persimmon (PSN) 1,311.00p +1.16%
Capita (CPI) 1,143.00p +1.15%
Admiral Group (ADM) 1,510.00p +1.14%
Antofagasta (ANTO) 781.00p +1.10%
FTSE 100 - Fallers
Babcock International Group (BAB) 1,226.00p -1.92%
Lloyds Banking Group (LLOY) 78.82p -1.66%
Aberdeen Asset Management (ADN) 454.60p -1.60%
St James's Place (STJ) 816.50p -1.27%
National Grid (NG.) 839.00p -1.12%
Rexam (REX) 530.50p -1.03%
William Hill (WMH) 347.60p -1.00%
Whitbread (WTB) 4,313.00p -0.85%
Wolseley (WOS) 3,384.00p -0.82%
Bunzl (BNZL) 1,677.00p -0.77%
FTSE 250 - Risers
JD Sports Fashion (JD.) 1,710.00p +4.01%
African Barrick Gold (ABG) 224.10p +3.85%
Crest Nicholson Holdings (CRST) 345.80p +3.29%
Centamin (DI) (CEY) 62.75p +2.87%
Alent (ALNT) 331.60p +2.03%
Keller Group (KLR) 977.00p +1.88%
Vedanta Resources (VED) 1,191.00p +1.79%
Cranswick (CWK) 1,310.00p +1.63%
WH Smith (SMWH) 1,065.00p +1.62%
Synergy Health (SYR) 1,418.00p +1.58%
FTSE 250 - Fallers
Daejan Holdings (DJAN) 4,853.00p -2.75%
International Personal Finance (IPF) 615.00p -2.61%
Hiscox Ltd (CDI) (HSX) 689.50p -2.41%
Barr (A.G.) (BAG) 630.00p -2.40%
Savills (SVS) 633.50p -2.16%
Spirent Communications (SPT) 99.50p -2.07%
Fisher (James) & Sons (FSJ) 1,322.00p -2.07%
Perform Group (PER) 260.00p -1.89%
RPC Group (RPC) 647.00p -1.75%
Oxford Instruments (OXIG) 1,344.00p -1.68%