Builders and miners buoy FTSE

Written by Citywire

February, 2020

In association with

Builders and miners buoy FTSE as coronavirus spread slows

The FTSE 100 has rallied as a fall in the number of new coronavirus cases buoyed investors while shares in house builders were lifted by upgrades from analysts at HSBC.

The UK blue-chip index rose 59 points, or 0.8%, to 7,441, as the number of new coronavirus cases in China fell for a second straight day.

‘The coronavirus crisis is deepening but it would appear it is spreading at a slightly slower pace, so dealers see that as a positive step,’ said David Madden, market analyst at CMC Markets UK. ‘Traders are clutching onto whatever small bits of positive news they can grab.’

That was despite a slew of bad news about the impact coronavirus – which has infected over 75,000 people and killed 2,012 worldwide – has had on global economies.

Tech giant Apple (AAPL.O) on Monday warned revenues would be down this quarter as iPhone sales stalled due to stalled manufacturing in China. Japan reported a 2.9% drop in exports and there was drastic drop in the German and eurozone ZEW economic sentiment indicator. The latest Cass freight shipping index shows a 9.4% fall year-on-year in January, the largest drop since 2009.

Neil Wilson, Markets.com analyst, said markets were being buoyed by expected stimulus but investors should be ‘more concerned about the fallout from the coronavirus’.

‘Expected stimulus and expectations for looser monetary policy is the only thing driving the market,’ he said. ‘But shipping volumes are tanking as global trade contracts. There is only so much bad-news-equals-good-news this market can take.’

Miners, which are sensitive to the Chinese economy given the country’s status as the world’s top metals consumer, were among the FTSE 100’s risers. They included:

  • Evraz (EVRZ) +2% at 384.6p;
  • Glencore (GLEN) +0.9% at 228.2p;
  • BHP Group (BHP) +0.5% at £16.77;
  • Anglo American (AAL) +1.4% at £20.83;
  • Antofagasta (ANTO) +1% at 857.2p.

House builders also gained this morning after HSBC upgraded its view on the sector, predicting strong house price rises in southern England. Berkeley (BKG) hit a record high after gaining 3.2% to trade at £55.32.

Barratt Developments (BDEV) rose 1.1% to 880.2p, Taylor Wimpey (TW) was up 2% at 236.2p and Persimmon (PSN) traded 1.8% higher at £33.00.

Outside the FTSE 100, the biggest movers were mid-cap asset manager Man Group (EMG), which jumped 7.2% to 159p after analysts at Exane upgraded the stock to ‘outperform’, while small-cap stock RPS Group (RPS), a professional services firm, slumped 12.6% to 150p, its worst price in eight months on weak annual results.

About the author

You may also like…

Register for our Market Watch Webconference Series

Register for our Market Watch Webconference Series

Wednesday 27 January 2021 – 2PM GMT/3PM CET Interest rates on cash and government bonds look set to remain low for the foreseeable future. This will help the economy but leaves an enormous challenge for investors in need of income. Join Karen Ward, Chief Market...

FTSE hits 10-month high as it smashes through 6,800

FTSE hits 10-month high as it smashes through 6,800

The FTSE 100 has hit a 10-month high after soaring through the 6,800 barrier for the first time since the Covid-19 crash as investors cheered the Democratic win in the Georgia Senate election. By 3.30pm the main London index jumped 229 points, or 3.2%, to 6,842 as it...

In association with