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Latest Share Chat

Britain's FTSE buoyed by resilient Persimmon

Tue, 23rd Aug 2016 16:03

* FTSE 100 up 0.6 percent

* Bullish Persimmon update boosts housebuilders

* Miners rebound from Monday's drop

* Tesco gains after industry data (Adds detail and quote, updates prices at close)

By Kit Rees and Alistair Smout

LONDON, Aug 23 (Reuters) - Britain's leading share indexrose on Tuesday, helped by a rise in housebuilders after strongresults from Persimmon suggested that the sector wascoping with the uncertainty from Britain's vote to leave theEuropean Union.

Persimmon rose 4.2 percent, the biggest riser on theblue-chip FTSE 100, closing at its highest level sincethe UK voted to leave the European Union.

It reported a jump in reservations by buyers of new homesover the past two months despite some surveys suggesting theso-called Brexit vote could cool the housing market.

The company does not build in central London, where somesurveys have found that prices of premium properties are fallingthe fastest.

"Less London exposure than peers looks to be paying offwhile current trends and outlook appear in line with recentproperty data," said Mike van Dulken, head of research atAccendo Markets.

"Like the rest of the FTSE, the company acknowledges'increased economic uncertainty' in light of the referendum, butinvestors appear more focused on increased customer interest inPersimmon properties".

Rival housebuilders Barratt Developments, Berkeley and Taylor Wimpey also rose, gaining between 4percent and 4.9 percent.

The FTSE 100 was up 0.6 percent at 6,868.51 points,its biggest daily gain since August 11. It drifted back lastweek after touching 14-month highs in mid-August.

Miners were also among the leading gainers, up2.3 percent to recoup Monday's slide, helped by stabilisingcopper prices.

The sector was also helped by an upbeat note from Jefferiesin which the broker upgraded BHP Billiton to "buy" from"hold". BHP Billiton's shares rose 4.4 percent.

"Demand has stabilized, supply is declining in most cases,balance sheets have strengthened due to FCF and asset sales, andvaluations are inexpensive. Fundamentals have clearly improved,"analysts at Jefferies said in a note.

Grocer Tesco was another standout performer, up 4.3percent after data from market researcher Kantar Worldpanelshowed that British grocery sales edged 0.3 percent higher yearon year in the 12 weeks to Aug. 14, with Tesco posting itsslowest rate of decline in 6 months.

Among mid-caps, JRP soared 16.8 percent after theannuity provider provided an upbeat trading update, though thestock remains down more than 30 percent since the Brexit vote. (Editing by David Goodman and Richard Balmforth)

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