ADVFN Morning London Market Report: Tuesday 29 June 2021

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London open: Housebuilders pace gains after Nationwide survey


London stocks rose in early trade on Tuesday, with housebuilders pacing the advance after an upbeat survey from Nationwide.

At 0840 BST, the FTSE 100 was up 0.4% at 7,104.28.

Housebuilders Taylor WimpeyBarratt DevelopmentsPersimmon and Berkeley Group all gained after the latest survey from Nationwide showed that house prices rose at their fastest rate since 2004 in June as buyers competed fiercely in a market rebounding from Covid-19 lockdowns.

The average price of a property in the UK rose 13.4% in June from a year earlier to a record £242,709, Britain’s biggest building society said. In the quarter to the end of June prices rose 10.3%, up from 6.3% in the first quarter of 2021.

June’s rate of growth was boosted by the shutdown of the property market a year earlier during the first Covid-19 lockdown but prices also rose sharply because of a buying frenzy.

Martin Beck, senior economic advisor to the EY ITEM Club, said: “There are some headwinds beyond the end of the stamp duty holiday. The end of the evictions ban on 31 May could prompt some landlords to sell to make up for rent arrears they have not been able to address until now, raising the supply of properties and weighing on prices.

“A similar outcome might arise if suggestions of a permanent decline in the number of foreign-born workers in the UK during the pandemic prove true. And, despite a rapidly recovering economy, higher inflation and the prospect of an increase in unemployment when the furlough scheme ends means the outlook for household income growth is not all positive.

“But for the time being, the housing market is likely to continue to be on the upside.”

Elsewhere, UDG Healthcare edged up after US private equity firm Clayton, Dubilier & Rice confirmed its increased final £2.7bn offer for the Dublin-based company.

IWG shares surged following a report the office space provider has held talks with US private equity firm CC Capital about a possible £4bn takeover. According to Sky News, talks were held in the last month but it was not known whether they are ongoing.

United Utilities was knocked lower by a downgrade to ‘underweight’ at Morgan Stanley.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Barclays Plc +2.73% +4.68 176.20
2 Ocado Group Plc +2.23% +45.00 2,064.00
3 Legal & General Group Plc +2.22% +5.80 266.50
4 Persimmon Plc +2.21% +65.00 3,000.00
5 Evraz Plc +2.00% +12.00 611.40
6 Taylor Wimpey Plc +1.78% +2.85 163.30
7 Direct Line Insurance Group Plc +1.72% +5.00 296.50
8 Barratt Developments Plc +1.59% +11.20 714.20
9 Kingfisher Plc +1.52% +5.50 367.50
10 Informa Plc +1.47% +7.40 512.40


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Tui Ag -3.49% -13.40 370.70
2 Fresnillo Plc -1.65% -13.20 787.80
3 United Utilities Group Plc -1.46% -14.60 983.00
4 Anglo American Plc -1.41% -41.00 2,860.50
5 Rolls-royce Holdings Plc -0.80% -0.80 99.70
6 Carnival Plc -0.69% -11.40 1,639.80
7 Relx Plc -0.67% -13.00 1,916.00
8 Ashtead Group Plc -0.56% -30.00 5,344.00
9 Morrison (wm) Supermarkets Plc -0.55% -1.30 233.20
10 Smith (ds) Plc -0.43% -1.80 414.90


Europe open: Shares rally as IWG bid rumours spur investors

European shares rallied at the opening on Tuesday as reports of a potential takeover for IWG boosted the market.

The pan-European Stoxx 600 index was up 0.36% in early trade. Germany’s DAX rose 0.53% and the UK’s FTSE 100 gained 0.31% as data showed British house prices jumped by the most in more than 16 years in June.

“Markets remain finely balanced but generally positive ahead of a further raft of factors which are set to dictate the nearer term direction,” said Interactive Investor head of markets Richard Hunter.

“Volatility has dampened, with the approach to both the quarter and half-year end lessening the motivation to take on new positions, and rather to lock in any gains made so far.”

IWG, the world’s largest serviced office group and rival to WeWork, has been in secret talks about a potential takeover offer that could value the company at more than £4bn, Sky News reported citing unnamed sources. Shares in the company were up 8%.

Shares in French electrical parts supplier Rexel shares jumped as the company said it expected same-day sales growth of 12% – 15%, compared with its previous forecast of 5% – 7%.

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%. Taylor WimpeyPersimmon and Barratt Developments as a result.


US close: Dow ends session in the red, S&P 500 notches up another record high

Major indices put on a mixed performance on Monday amid renewed hopes for the passing of Joe Biden’s $1.0trn bipartisan infrastructure deal, a strong session for tech stocks and losses for some big-name energy firms.

At the close, the Dow Jones Industrial Average was down 0.44% at 34,283.27, while the S&P 500 ticked up 0.23% to 4,290.61 and the Nasdaq Composite saw out the session 0.98% firmer at 14,500.51.

The Dow Jones closed 150.57 points lower on Monday, taking a bite out of gains recorded on Friday, while the S&P 500 managed to extend upon the record high it notched up in the previous session.

In focus on Monday was news that Joe Biden’s huge, bipartisan infrastructure deal appeared to have been revitalised on Sunday after the President clarified that he had no intention of vetoing the legislation if it came without a separate reconciliation bill including funding for issues like climate change, child care, health care and education, as favoured by Democrats, leading Republican senators to then agree to push the deal through.

On the macro front, the Dallas Fed‘s manufacturing index came in at 31.1 in June, short of an expected print of 32.5 and down from the previous month’s reading of 34.9.

In the corporate space, AppleAmazon and Salesforce all traded higher, while Boeing shares fell 3.60% after regulators warned the company that it was unlikely to receive certification for its long-range aircraft until at least 2023.

Chevron and Exxon Mobil shares weighed on the Dow, down 3.08% and 2.52%, respectively.


Tuesday newspaper round-up: Covid passports, HS2, Facebook, BrewDog

Hopes have been raised of summer holidays in Europe for fully vaccinated Britons as a deal with Brussels on Covid passports neared completion and Germany failed to convince popular destinations to pull an “emergency brake” on UK visitors. Restrictions on travel are tightening across the continent for tourists coming from the UK who have not had two jabs, owing to concerns over the highly transmissible Delta variant now dominant in Britain. – Guardian

The UK government has held emergency talks with retailers, logistics groups and wholesalers as a shortage of lorry drivers threatens to leave gaps on supermarket shelves. Officials from the Department for Environment, Food and Rural Affairs (Defra) are understood to have discussed potential solutions, including relaxing restrictions on drivers’ working hours and increasing capacity for HGV driving tests and training to help bring in new local drivers. – Guardian

Ministers are refusing to disclose how much a row over a HS2 contract has cost taxpayers after striking an out of court settlement with a spurned Spanish train manufacturer. Madrid-listed Talgo agreed a “mutual resolution” with the Government following a lawsuit against the state-funded line when it failed to win a £2.8bn contract to build 54 trains. The Department for Transport is refusing to reveal the terms of the deal or to say how much the dispute cost it in legal fees. – Telegraph

The stock market value of Facebook rose above $1 trillion last night after the social media company won a significant legal battle against an American regulator. A federal judge yesterday dismissed an antitrust lawsuit against Facebook that sought to force the social media company to sell Instagram and WhatsApp, saying that the Federal Trade Commission’s action was “legally insufficient”.- The Times

The co-founder of BrewDog is selling off personal property assets linked to the craft brewer ahead of a planned flotation amid concerns over potential conflicts of interest. James Watt told The Times that his remaining property holdings rented to the Scottish brewer were “in the process of being divested” and that three sites he owned and leased to BrewDog had been sold in the past two years. – The Times


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