Housebuilders shoot up on relief over mortgage rates prospects
BARGAIN-HUNTING investors gave the housebuilding sector its best session in more than a decade today as a buying frenzy buoyed London shares.
Relief over the outlook for mortgage rates following inflation’s big downside surprise meant heavily sold Persimmon shares rebounded 5% or 57.5p to 1149.5p and Barratt Developments surged by 21.4p to 445.7p.
Redrow and Crest Nicholson jumped by 6% in the FTSE 250 index as investors made sure not to be on the wrong side of a potential turning point in the sector.
Other interest rate-sensitive sectors such as property and utilities were also swamped with buyers, particularly logistics and warehousing business Segro up 5% or 37.6p to 780.8p and United Utilities 4% or 33.4p higher at 988p.
Their support meant the FTSE 100 index rose 79.88 points to 7533.57 in contrast to initial expectations for a flat session, while the UK-focused FTSE 250 index returned to form with a surge of 2.5% or 455.63 points to 19,073.85.
Other big risers in the second tier included British Land, which surged 8% or 25.15p to its highest level since early June at 350p.
Only a handful of stocks across the FTSE 350 were in negative territory, led by Antofagasta after the Chile-based miner cut its production guidance for the year.
Shares fell 2% or 35p to 1472p, alongside a decline of 44p to 5066p for Rio Tinto.
The iron ore giant’s latest update revealed momentum for its Pilbara assets in Western Australia but this was offset by downgrades and “much more to do” in other operations.
Anglo American shares also fell 23p to 2288p and Glencore lost 2.9p to 451.1p in a further reminder to investors about the uncertain global economic outlook.
In the FTSE All-Share, Restaurant Group jumped 8% or 3.25p to 42.25p after it reported more market-beating growth from its Wagamama chain.
With Brunning & Price pubs also delivering an “exceptional” trading performance, the group stuck by expectations for its full-year results.
In contrast, shares in AIM-listed buildto-rent firm Watkin Jones slumped 30p to 47p after it downgraded forecasts for the second half of the year due to a deterioration in market conditions.