After yesterday’s disappointing turn, UK stocks have perked up on Tuesday with the FTSE 100 rising 0.5% to 7,106.
“Investors bid up shares in tobacco sellers, banks and telecoms, while there was mixed appetite for miners with Rio Tinto and Glencore among the biggest contributors to the index in points terms, while Anglo American was the biggest detractor.
“Housebuilders were in demand after new figures from Nationwide revealed that UK house prices grew at their fastest annual pace for more than 17 years in June, up 13.4%,” says Russ Mould, investment director at AJ Bell.
“Taylor Wimpey, Persimmon and Barratt Developments were among the top risers as investors hoped the frantic activity in the UK property market would benefit their earnings.
“The key issue is whether we’re at the peak of the activity as buyers rush to take advantage of the stamp duty holiday which starts to taper from the start of July.
“However, with so many properties being snapped up fast, there could be many potential buyers waiting in the wings for the market to calm down a bit – suggesting that we may not see a massive crash once the stamp duty holiday comes to an end on 30 September.
“On the FTSE 250, holiday seller TUI had another bad day, falling 3.4%. Its shares have been on a losing streak since mid-May.
“Bid chatter pushed up shares in serviced officer provider IWG, best known for its Regus brand. Rumours suggest interest from private equity, coming at a time when many companies are deciding they want more flexibility with where their staff work, and so serviced office space is one alternative to owning office blocks that may no longer be fully occupied.”