London open: Stocks rise on positive Asian cues; housebuilders pace gains
By Michele Maatouk
Date: Monday 06 Jul 2020
(Sharecast News) - London stocks rose in early trade on Monday, taking their cue from a positive session in Asia, with housebuilders pacing the gains.
At 0840 BST, the FTSE 100 was up 2% at 6,280.91.
Spreadex analyst Connor Campbell said: "The prospect of more economic stimulus, and a five-year high for stocks in China, allowed investors to ignore another disastrous weekend for Covid-19 cases.
"The daily figure in the US is stubbornly above 50,000, India has just become the third most infected nation with 697,413 known cases, while globally cases now sit at 11.4 million. There have also been warnings about the severe long-term health impact of even a 'mild' instance of the illness.
"But, with China's CSI300 Index at its best levels since summer 2015, and the Shanghai Composite surging 4.2%, the European markets found plenty of reason to close their eyes and rocket forwards."
Campbell said the FTSE had more reason than most to celebrate. "After a £1.57bn arts package was confirmed on Sunday night following 'leaks', speculation has turned to Wednesday and what is being framed as a 'mini-budget' from Rishi Sunak.
"Measures doing the rounds include a 6-month pause on stamp duty, a £111m expansion of trainee programmes, a potential cut to VAT, and a £500 voucher for all UK adults to spend in struggling sectors like hospitality and face-to-face retail."
In equity markets, housebuilders rallied on reports that Chancellor Rishi Sunak will announce plans this week to raise the threshold at which people start paying stamp duty to as much as £500,00 from £125,000. Persimmon, Barratt Developments, Taylor Wimpey, Vistry, Redrow and Bellway were all sharply higher.
The Times said the move, which is expected to be implemented in the autumn budget, is a temporary measure intended to stimulate the housing market.
Barratt was also in focus after saying its current forward order book was strong with sales ahead of the same time last year as it emerged from the coronavirus lockdown that closed all its sites.
Lloyds Banking Group was in the black after it said chief executive Antonio Horta-Osorio planned to leave the bank in a year's time as it announced that Robin Budenberg would take over as chairman in early 2021.
Cineworld gained as it said it plans to counter-claim against Cineplex, after the Canadian cinema chain announced at the end of last week that it was filing a lawsuit against it for backing out of a $2.1bn deal.
On the downside, Hochschild Mining fell as it said it was suspending operations at its Inmaculada mine in Peru after some of its workers tested positive for Covid-19. The South America-focused miner said the infections occurred "despite taking a number of preventative measures, including a comprehensive testing programme as well as quarantine for all employees".
In broker note action, DS Smith was knocked lower by a downgrade to 'hold' at Jefferies, while Softcat was hit by a downgrade to 'sell' at Citi. Computacenter was up after an initiation of coverage at 'buy' by Citi.
Market Movers
FTSE 100 (UKX) 6,280.91 2.01%
FTSE 250 (MCX) 17,572.03 1.56%
techMARK (TASX) 3,783.09 1.18%
FTSE 100 - Risers
Persimmon (PSN) 2,398.00p 6.15%
Barratt Developments (BDEV) 520.00p 6.06%
HSBC Holdings (HSBA) 405.00p 5.61%
Taylor Wimpey (TW.) 144.55p 5.51%
Standard Chartered (STAN) 457.80p 5.24%
Rolls-Royce Holdings (RR.) 275.80p 4.79%
Next (NXT) 5,018.00p 4.59%
Melrose Industries (MRO) 122.30p 4.53%
Royal Bank of Scotland Group (RBS) 126.80p 4.06%
Aviva (AV.) 283.90p 3.80%
FTSE 100 - Fallers
Smith (DS) (SMDS) 286.30p -1.75%
Hikma Pharmaceuticals (HIK) 2,184.00p -0.55%
Ocado Group (OCDO) 1,995.00p -0.25%
Polymetal International (POLY) 1,569.50p 0.03%
Fresnillo (FRES) 859.20p 0.42%
Reckitt Benckiser Group (RB.) 7,478.00p 0.43%
Sainsbury (J) (SBRY) 198.15p 0.46%
Avast (AVST) 541.00p 0.46%
AstraZeneca (AZN) 8,500.00p 0.48%
Halma (HLMA) 2,288.00p 0.53%
FTSE 250 - Risers
Vistry Group (VTY) 722.00p 6.02%
Vivo Energy (VVO) 82.10p 5.39%
Wood Group (John) (WG.) 207.40p 5.01%
Carnival (CCL) 1,050.00p 4.79%
Hammerson (HMSO) 87.22p 4.76%
Redrow (RDW) 447.40p 4.73%
Crest Nicholson Holdings (CRST) 207.20p 4.65%
Bellway (BWY) 2,615.00p 4.64%
Cineworld Group (CINE) 62.84p 4.45%
Aston Martin Lagonda Global Holdings (AML) 49.30p 4.45%
FTSE 250 - Fallers
Hochschild Mining (HOC) 179.20p -4.63%
Softcat (SCT) 1,110.00p -2.29%
Energean (ENOG) 598.00p -1.81%
Chemring Group (CHG) 249.50p -1.19%
LXI Reit (LXI) 113.20p -1.05%
Rathbone Brothers (RAT) 1,450.00p -0.68%
Domino's Pizza Group (DOM) 313.20p -0.63%
Convatec Group (CTEC) 197.20p -0.60%
Playtech (PTEC) 295.20p -0.47%
Gamesys Group (GYS) 889.00p -0.45%
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