(Correcting direction of FTSE 250 index.)
LONDON (Alliance News) - Housebuilders lead a surprisingly upbeat UK equities market Monday, occupying six of the top ten spaces in the FTSE 350, buoyed by an extension to the UK government's Help to Buy scheme.
Chancellor George Osborne confirmed that the government's flagship Help to Buy housing scheme is being extended by four more years. Speaking ahead of Wednesday's Budget presentation, Osborne said that extending the scheme to the end of the decade would help to finance up to 120,000 houses.
The scheme has been boosting housebuilding stocks since its introduction last year, but was initially only supposed to be in place for two years.
Persimmon leads the FTSE 100 higher on the news, with FTSE 250 stocks Bovis Homes, Taylor Wimpey, Barratt Development, Bellway and Crest Nicholson all big gainers.
The scheme has been accused of fuelling a house price bubble, and the latest figures from property website Rightmove on Monday showed the average UK house price at its most expensive ever.
Rightmove said residential property prices in the UK rose to a record high in March, fuelled by economic recovery, a favourable mortgage market boosting demand, and rising prices luring more sellers back into the property market. The average asking price of a UK house advanced 1.6% in March from the prior month - marking the third month of increase in a row - though coming in slower than February's growth rate of 3.3%.
On a yearly basis, the house price index posted a 6.8% gain during March, taking the average price up to GBP255,962. The average price in London, where concern over an asset class bubble is strongest, increased to a new record high of GBP552,530.
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FTSE 100: up 0.4% at 6,550.91
FTSE 250: up 0.7% at 16,234.89
AIM ALL-SHARE: up 0.1% at 870.35
GBP-USD: down at 1.6618
EUR-USD: down 1.3902
GOLD: down USD1,378.90 an ounce
OIL (Brent): down USD107.10 a barrel
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Key UK Corporate News
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FTSE 100: Vodafone Group will acquire Grupo Corporative Ono S.A for EUR7.2 billion, as part of its strategy to build a unified communications provider in Spain. Bunzl has acquired Lamedid Comercial e Servicos Ltda in Brazil to expand its footprint in the Brazilian healthcare market. Glencore Xstrata is on the verge of reaching a deal on the multibillion dollar sale of its Las Bambas Peruvian copper project to a Chinese consortium, according to a report in the Wall Street Journal.
FTSE 250: Cairn Energy said the exploration JM-1 well offshore Morocco has been plugged and abandoned without testing. Pennon Group said its water arm South West Water has accepted Ofwat's risk and reward guidance as part of the next regulatory price review. Polymetal International announced significant falls in ore reserves and mineral resources in 2013, but expects significant improvements in both during 2014. Essar Global Fund late Friday reaffirmed its offer for the remainder of Indian oil company Essar Energy at a price of 70 pence per share, the same price which Essar Energy's independent directors said in February undervalues the business. The directors immediately Friday responded by repeating their rejection of the offer.
AIM: Shares in Ideagen are trading up after the information management software provider said it has won two NHS contracts in Birmingham worth a combined GBP400,000 in first-year value. Tracsis has also risen after the company said it expects its full-year results to exceed current market forecasts, as it saw pretax profit rise in the half-year ended January 31, boosted by its acquisition of Sky High Technology. Shares in Oxford Advanced Surfaces Group have risen. The technology company, which develops engineered materials and surface modification applications in various markets, said it is currently investigating the use of its proprietary Onto technology platform to modify graphene chemically for multiple applications. Shares in LiDCO Group are trading higher. The company said it will be showcasing the new version of LiDCOrapid software at the 34th International Symposium on Intensive Care and Emergency Medicine later this week. Shares in Petroneft Resources also are up. The oil production company has completed a USD6.7 million fundraising and production has increased at its 61 and 67 licences in Russia. Rose Petroleum shares are trading higher after the natural resources company said it has signed a farm-in agreement to acquire a 75% stake in oil, gas and hydrocarbon leases covering 195,000 acres in Utah. At the other end of the market, shares in Creat Resources Holdings have dropped. The resources investment company said its net loss widened to USD7.6 million for the six months to the end of 2013, from USD4.0 million the previous year. Additionally, if it cannot implement its investment policy by April 4, trading in the company will be suspended according to AIM rules until such time as the company makes an investment. Kimberley Enterprises also is trading lower after the property developer said its financial condition remains weak, as it has not yet received the sale proceeds from disposals from its joint ventures.
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Top Economics And General
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Eurozone inflation slowed in February to the level last seen in October, final data from Eurostat showed. Inflation fell to 0.7% in February from 0.8% in January.
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British manufactures' business outlook for this year climbed to record high, with employment growth seen accelerating significantly, reflecting the broad nature of the economic recovery, a survey by manufacturers' organization EEF and accountancy firm BDO revealed. Surveyed manufacturers said they expect both output and new orders record stronger growth in the first quarter than in the final months of last year, with the electronics, motor vehicles and electrical equipment sectors recording the biggest improvement in activity.
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The EU's foreign ministers were set to consider punishing Moscow with sanctions over its actions in Crimea, one day after the Ukrainian peninsula voted to join Russia in a referendum. The US has already imposed visa restrictions on Russians and Crimeans accused of threatening Ukraine's stability, while the EU has suspended negotiations with Moscow on a new cooperation agreement and the easing of visa rules. The bloc's leaders have also threatened travel bans, asset freezes and the cancellation of a June EU-Russia summit if Moscow does not tone down tensions in Ukraine.
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More than 95% of Crimeans voted for the Ukrainian region's accession to Russia in a controversial referendum on Sunday, according to preliminary results. The Black Sea peninsula's secession was supported by 95.5%, while just 4.5% voted for Crimea to remain an autonomous republic inside Ukraine, election authorities said after half of the votes were counted, according to Russian media. Turnout was almost 83%, the reports said. A final result was expected Monday.
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Ukrainian lawmakers backed a decree by interim President Oleksandr Turchynov to partially mobilize the country's armed forces. The mobilization means that 40,000 reservists will be called up, 20,000 each by the armed forces and the national guard, Andriy Parubiy, the head of the Ukraine's security council, told parliament, according to local media. The move comes on day after Crimeans voted to join Russia in a controversial referendum.
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The Chinese government is set to allow its currency, the renminbi or yuan, to fluctuate more widely against the dollar in the latest sign that the country is loosening its grip on the economy. China's Central Bank said that beginning on Monday, the daily trading band would double to 2% on either side of a government-regulated parity rate, which could result in wider price fluctuations. "The widening is within rational range and is a tentative step towards the liberalization of the yuan's exchange rate," said Yi Xianrong, a senior financial researcher at the Chinese Academy of Social Sciences.
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China unveiled measures to speed urbanization in a bid to provide impetus to economic growth through lifting income and consumption among rural residents. In its urbanization plan for 2014-2020, the government said Sunday it will reform "hukou" registration, and improve water safety as well as air quality. The "hukou" a complex household registration system discourages rural residents to move and settle in urban areas. Easing controls on residency status will unlock huge income potential and raise domestic demand.
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China sharply criticized Malaysia for its handling of an investigation into the disappearance of a commercial aircraft with 239 people aboard nine days ago. The criticism came as a Malaysian police source ruled out a connection between the pilot's political affiliations and the disappearance of Malaysia Airlines flight MH 370. China's official state news agency Xinhua said valuable time was lost due to the "lack of authoritative information" about what happened to the aircraft, which had radically changed course and had its communication system deliberately turned off.
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Malaysia is to deploy its ships and aircraft in the "southern corridor" as it refocused its search operations for the missing Malaysia Airlines jet, which disappeared more than a week ago. The area in question stretches approximately from Indonesia to the southern Indian Ocean. The refocus in search and rescue operations came after Prime Minister Najib Razak announced Saturday that the plane's communication system was intentionally disabled and the aircraft flew for up to seven hours toward an unknown destination. Malaysia's announcement that it would deploy its assets in the southern corridor came as Australia's Pirme Minister Tony Abbot said his country had agreed to take the lead in the search and rescue operations in the Indian Ocean.
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US President Barack Obama is to meet Palestinian President Mahmoud Abbas Monday just a few weeks before an important deadline in the Middle East peace process. Obama and Abbas are expected to discuss the difficult peace negotiations and the inability of the parties to achieve an agreement. Their talks follow a visit to Washington earlier this month by Israeli Prime Minister Benjamin Netanyahu. US Secretary of State John Kerry set the stage for Abbas' meeting with Obama on Sunday when he held a "frank and productive" discussion with Abbas about reaching a framework for negotiations in Middle East peace talks, according to a statement released by a senior State Department official.
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Syrian government troops have seized control of Yabroud, a strategically important rebel-held town 75 kilometres north of the capital Damascus, a source from the Syrian military said Sunday. The military source told Syrian state news agency SANA that "troops fully control Yabroud town in rural Damascus and are currently combing the city, removing and dismantling car bombs and roadside explosives planted by terrorists." The Syrian government refers to all rebels fighting to overthrow the regime of President Bashar al-Assad as terrorists.
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Afternoon Watchlist:
13:15 US Capacity Utilization
13:15 US Industrial Production
14:00 US NAHB Housing Market Index
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Tuesday's Key UK Corporate Events
Antofagasta Full Year Results
IG Group Holdings Interim Management Statement
Berkeley Group Interim Management Statement
Bioquell Full Year Results
J Sainsbury Q4 Trading Statement
SDL Full Year Results
Cairn Energy Full Year Results
T Clarke Full Year Results
Mears Group Full Year Results
Zotefoams Full Year Results
Xaar Full Year Results
Mecom Group Full Year Results
Resolution Full Year Results
Source Bioscience Full Year Results
Spirit Pub Company Q2 Trading Statement
UTV Media Full Year Results
ASOS Q2 Trading Statement
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Tuesday's Key Economic Events
01:30 China House Price Index
10:00 EU Trade Balance
10:00 Germany ZEW Survey - Economic Sentiment
10:00 EU ZEW Survey - Economic Sentiment
12:30 US Building Permits
12:30 US Consumer Price Index
12:30 US Housing Starts
12:55 US Redbook index
17:45 UK BOE's Governor Carney speech
23:50 Japan Merchandise Trade Balance
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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