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(Alliance News) -Â London stocks surged at the start of the week with sentiment underpinned by a raft of improved data out of Europe and the US.
Housebuilders ended among the top blue-chip performers in London on Monday as Barratt Developments sounded upbeat on post-lockdown activity, while boohoo sank on AIM as it distanced itself from a purported supplier following a Sunday Times report.
The FTSE 100 index closed up 128.64 points, or 2.1%, at 6,285.94. The FTSE 250 ended up 248.00 points, or 1.4%, at 17,550.03, and the AIM All-Share closed down 2.46 points, or 0.3%, at 890.76
The Cboe UK 100 ended up 2.3% at 626.25, the Cboe UK 250 closed up 1.3% at 14,926.65, and the Cboe Small Companies ended up 1.5% at 9,363.69.
The pound was quoted at USD1.2492 at the London equities close Monday, higher compared to USD1.2465 at the close on Friday.
"After Thursday's non-farm payrolls excitement is does look as if the data is on the right track to keep propping up the stock market rally," said Chris Beauchamp, chief market analyst at IG.
UK construction sector activity rose sharply in June as more sites began to reopen following easing of coronavirus lockdown measures, IHS Markit said.
The IHS Markit/CIPS UK Construction Total Activity Index rose to 55.3 in June, from 28.9 in May. The reading beat market expectations of 47.0.
Markit said the June print was the fastest rise in construction activity for nearly two years and indicated a strong increase in total construction output. Further, the June data pointed to a sharp turnaround in the performance of the UK construction sector as the phased restart of work on site helped to lift output volumes and boost business confidence.
There was also improved construction data from the eurozone.
The IHS Markit Eurozone Construction Total Activity Index rose sharply to 48.3 in June from 39.5 in May. June's contraction was the weakest drop since February, IHS Markit noted.
France and Italy recorded construction output growth, while Germany posted a further marked decline.
Meanwhile, eurozone retail sales were sharply higher in May, data from Eurostat showed, as Covid-19 lockdown measures across the bloc began to ease.
Sales in the euro area rose 18% month-on-month in May, rebounding from a 12% drop in April. Within the EU, sales grew 16%. Versus the previous month, euro area retail trade increased by 38% for automotive fuels, by 35% for non-food products and by 2.2% for food, drinks & tobacco.
The euro stood at USD1.1312 at the European equities close Monday, higher against USD1.1242 at the same time on Friday.
In European equities on Monday, the CAC 40 in Paris ended up 1.5%, while the DAX 30 in Frankfurt gained 1.6%.
Adding to Monday's run of good data, the Institute for Supply Management said activity in the US non-manufacturing sector ticked up in June, growing for the first time since March.
The non-manufacturing index registered 57.1 in June, a sharp 11.7 points higher than May's reading of 45.4. A reading above 50 indicates expansion and one below, contraction.
Earlier on Monday, IHS Markit's own purchasing managers' index also pointed to an improvement in conditions, but still indicated contraction in the service sector. The business activity index registered 47.9 in in June, up sharply from 37.5 in May.
Stocks in New York were higher at the London equities close, with the Dow Jones up 1.4%, the S&P 500 index up 1.5%, and the Nasdaq Composite up 2.4%.
Against the yen, the dollar was trading at JPY107.49, lower compared to JPY107.52 late Friday.
Brent oil was quoted at USD43.43 a barrel at the London equities close Monday, up from USD42.66 late Friday. Gold was quoted at USD1,784.81 an ounce at the London equities close Monday against USD1,775.00 at the close on Friday.
In London, ending the session as Monday's top blue-chip performer was Barratt Developments, gaining 8.0%.
Barratt said since the UK government's restrictions on housing market activity were lifted in mid-May there has been a welcome recovery in internet activity, site visitors and net reservations across both the industry and its business.
Following the reopening of its sales centres, the company has seen an increase in lead volumes, which are running at levels in excess of those achieved in the same period in 2019, Barratt said. In the six weeks since reopening it achieved a sales rate of 0.63, marginally lower from 0.69 net private reservations per active outlet per average week, with no "discernible change in pricing levels".
"Now, with our construction sites operational across the UK, we begin the new financial year with cautious optimism supported by our strong forward order book and our well capitalised balance sheet," Chief Executive David Thomas said.
For the year to June 30, Barratt completed 12,604 homes, down from 17,856 homes the year before.
Fellow housebuilders ended higher in a positive read-across, with Persimmon advancing 6.2% and Taylor Wimpey 5.1%.
Aviva closed 3.6% higher after the insurer promoted Independent Non-Executive Director Amanda Blanc to chief executive officer with immediate effect.
Maurice Tulloch has stepped down as CEO with immediate effect "for family health reasons" and has left the board, Aviva said. Tulloch joined Aviva in 1992 and its board in 2017 before becoming CEO in March 2019.
DS Smith shed 1.1% after Jefferies cut the packaging firm to Hold from Buy.
Ending lower in the FTSE 250 was Cineworld, down 4.3% after Canada-based Cineplex initiated legal proceedings against the London-listed cinema chain on the grounds that it breached its obligations over the proposed CAD2.8 billion, or GBP1.6 billion merger.
Cineplex is seeking damages of up to CAD2.18 billion less the value of Cineplex shares retained by shareholders.
In mid-June, Cineworld said it had dropped the merger with Cineplex after the latter breached a number of its covenants under the acquisition deal, and did not remedy these breaches when asked to do so. The takeover would have created North America's largest chain of movie theatres to better compete with AMC Entertainment.
Cineworld said it intends to counter-claim against Cineplex for all its damages and losses.
On AIM, boohoo shares slumped 23%. The online fashion retailer distanced itself from a purported supplier after an undercover reporter from the Sunday Times observed working practices at a Leicester factory which violated government-required social distancing measures and minimum wage requirements.
boohoo responded to findings by saying that its early investigations revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer. It stated it believes a different company is using Jaswal's former premises, adding that its currently trying to establish the identity of this company.
boohoo, which owns brands such as Pretty Little Thing and Nasty Gal, said conditions at the Jaswal Fashions factory in Leicester were "totally unacceptable and fall woefully short of any standards acceptable in any workplace".
The UK corporate calendar for Tuesday has full-year results from athleisurewear retailer JD Sports Fashion and bike seller Halfords, while Premier Inn owner Whitbread puts out a trading statement and iron ore pellet producer Ferrexpo its second quarter production.
Tuesday's economic calendar has German industrial production at 0700 BST and UK Halifax house prices at 0830 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
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