London shares bounce on stimulus, recovery hopes; homebuilders jump
Reuters
Published Jul 06, 2020 08:21
Updated Jul 06, 2020 09:25
By Shashank Nayar and Sagarika Jaisinghani
(Reuters) - London's FTSE 100 jumped more than 2% on Monday as hopes of more stimulus to kickstart a battered global economy bolstered risk appetite, while homebuilders jumped on a report of property tax concessions to buyers.
Persimmon (L:PSN), Barratt Developments (L:BDEV) and Taylor Wimpey (L:TW) led gains on the FTSE 100 as a report said finance minister Rishi Sunak planned to raise the property tax threshold to as high as 500,000 pounds ($623,700) in an attempt to exempt most homebuyers from paying any stamp duty.
Barratt also reported a higher order book value and said it was starting the new financial year with "cautious optimism".
The export-laden FTSE 100 (FTSE) was up 2.2% and the mid-cap FTSE 250 (FTMC) 1.5%, joining an Asian rally that was powered by a surge in China's blue chip stocks even as soaring U.S. coronavirus cases delayed reopenings.
"With an unprecedented amount of cash in the system, equities and high-yielding bonds are attracting a lot of interest from investors," said Hussein Sayed, market strategist at FXTM.
"That may continue to push risk assets higher, although valuations are approaching extreme levels."
The FTSE 100 has rebounded more than 25% from a virus-driven crash in March, aided by historic global stimulus and improving economic data.
Auto stocks (FTNMX3350) rose 1.5% as data showed the pace of declines in new car sales in the UK slowed in June, while construction stocks (FTNMX2350) gained 2.8% ahead of figures likely to show a pickup in the construction industry last month with several parts of the economy reopening.
Prime Minister Boris Johnson has said he would set out a timetable this week for when the remaining sectors of the British economy would be allowed to reopen.
Insurer Aviva (L:AV) gained 4.8% as it said Maurice Tulloch was stepping down with immediate effect for family health reasons and named independent director and former Zurich Insurance executive Amanda Blanc as his replacement.
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Written By: Reuters
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