Homebuilders lift UK stocks on house price boost; IWG slumps
(Reuters) – A jump in housing stocks lifted UK stock indices on Monday, as data showed domestic house price growth hit a near seven-year high last month, while office space provider IWG slumped to a four-month low after issuing a profit warning.
The FTSE 100 reversed early declines to rise 0.2% by 0804 GMT, with homebuilders including Barratt Developments and Taylor Wimpey jumping more than 2%.
The mid-cap FTSE 250 was up 0.3%, hovering just below record highs.
After breaking above the 7,000 mark in mid-April, the export-heavy FTSE 100 is on course to post its fifth straight month of gains as a gradual reopening from COVID-19 lockdowns sparks optimism around a faster economic recovery.
But with fears of rising inflation and new variants of the novel coronavirus threatening the recovery, analysts said global equity markets were at risk of a correction.
“Inflation remains squarely in focus and the largest potential source of investors angst and market volatility this week,” said Neil Wilson, chief market analyst at Markets.com.
All eyes will be on U.S. inflation data for May, due on Thursday, for cues on whether the Federal Reserve was likely to start tightening monetary policy sooner than expected.
Mining stocks fell 1.2% as data showed China’s export growth slowed more than expected last month due to disruptions caused by COVID-19 cases at the country’s major southern ports.
In company news, office space provider IWG tumbled 16.2% to head for its worst day in more than a year, as it said underlying core earnings for the current year would be well below the crisis-hit 2020 level due to continued lockdown restrictions in some markets.
Life sciences company NetScientific Plc surged 22.7% after saying one of its subsidiaries had entered an exclusive licensing agreement with AstraZeneca Plc to globally sell a COVID-19 test.
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