LONDON MARKET CLOSE: FTSE 100 Ends Higher Thanks To Housebuilders

(Alliance News) - Stocks in London ended higher on Tuesday, with the FTSE 100 in the green following a rise in housebuilders, offsetting a fall in gold miners as the precious metal eased from record highs.

The FTSE 100 index closed up 24.38 points, or 0.4%, at 6,129.26. The FTSE 250 ended up 120.29 points, or 0.7%, at 17,278.23, and the AIM All-Share closed up 2.09 points, or 0.2%, at 891.34.

The Cboe UK 100 ended down 0.1% at 608.138, the Cboe UK 250 closed up 0.3% at 14,627.71, and the Cboe Small Companies ended up 0.4% at 9,110.16.

In Paris the CAC 40 ended down 0.6%, while the DAX 30 in Frankfurt ended down 0.4%.

"The FTSE... desperately clung onto a 0.4% increase despite gains for the pound and a wave of red across its mining stocks. The UK index’s white knight was the housing sector, which rallied on the back of news the government may extend the Help to Buy scheme beyond December," said Spreadex analyst Connor Campbell.

In the FTSE 100, housebuilders Berkeley Group, Barratt Developments, Taylor Wimpey and Persimmon rallied on the back of a Financial Times report suggesting UK ministers are drawing up plans to extend the Help to Buy scheme beyond its December deadline to prevent buyers losing out because of coronavirus delays.

Berkeley, Barratt, Taylor Wimpey and Persimmon ended up 5.0%, 4.7%, 3.1% and 2.3% respectively.

Reckitt Benckiser closed up 1.0% after the household goods maker raised its outlook after a strong first half, boosted by cleaning products such as Dettol and Lysol.

The consumer goods company reported an 11% increase in net revenue in the six months to the end of June to GBP6.91 billion. On a like-for-like basis revenue grew by 12%.

Reckitt reported Hygiene like-for-like sales growth of 16% and Health growth of 9.3%. Pretax profit rose to GBP1.44 billion from GBP1.26 billion year-on-year.

Reckitt said its underlying performance has been ahead of expectations, with the Dettol disinfectant maker getting a boost from Covid-19. Its 2020 performance is now expected to be better than forecast back in April.

At the other end of the large caps, Fresnillo ended down 1.5% after the Mexican gold miner was hit by profit-taking after reporting positive interim results.

Fresnillo posted an increase in revenue and profit despite lower ore yields, thanks to rising silver and gold prices in the first half of 2020.

The Mexican gold and silver producer said its pretax profit in the half year to June 30 was up 137% at USD127.9 million, despite taking a hit of USD31.8 million from a revaluation of the Silverstream contract as well as USD41.0 million lost from foreign exchange.

Fresnillo declared an interim dividend of USD0.023 per share, a 12% reduction from USD0.026 a year prior, paid from the remaining balance of retained earnings generated before 2014.

Gold was trading at USD1,953.15 an ounce on Tuesday afternoon, up from USD1,937.08 late Monday. Still, the precious metal was retreating from a fresh record high of USD1,981.00 in early trade on Tuesday.

"Gold neared the USD2,000 mark overnight before dropping sharply, although it along with silver have since bounced off their lows again. Fundamentally nothing has changed, but prices were getting extremely overbought as they rose sharply in a short space of time. Thus, one can only conclude that it was indeed profit-taking near key levels which sparked a sharp sell-off overnight, as weaker longs were shaken out," said ThinkMarkets analyst Fawad Razaqzada.

Russian gold miner Polymetal International ended down 1.7%.

The pound was quoted at USD1.2930 at the London equities close, up from USD1.288 at the close Monday.

The euro stood at USD1.1731 at the European equities close, down from USD1.1775 late Monday. Against the yen, the dollar was trading at JPY105.10, flat from JPY105.15 late Monday.

Stocks in New York were lower at the London equities close amid a flurry of corporate earnings reports and division on Capitol Hill over a new round of stimulus.

The DJIA was down 0.3%, the S&P 500 index down 0.1% and the Nasdaq Composite down 0.4%. The tech-dominated Nasdaq Composite Index was lower ahead of a key Congressional hearing on Wednesday over the dominance of Apple, Amazon, Facebook and Google.

As expanded unemployment payments and a moratorium on evictions are set to expire, Senate Republicans late Tuesday unveiled a USD1 trillion support package that slashes additional weekly jobless benefits to USD200 a week from USD600, but also would offer a second round of USD1,200 payments to individuals and give funding to schools, provided they reopen.

This sets the stage for a showdown with Democrats who are pushing their own USD3 trillion plan. Republicans will need support from Democrats to get a bill on the president's desk and the two sides are starting far apart.

On the corporate front, Pfizer reported a double-digit second-quarter revenue fall but the US pharmaceutical firm raised its annual guidance regardless.

In the period to June 28, revenue fell 11% to USD11.80 billion from USD13.26 billion the same period the year before. Net income fell 32% to USD3.43 billion from USD5.05 billion.

Pfizer's Biopharma unit delivered a 3.8% revenue rise, partly driven by its Vyndaqel cardiovascular drug. There was also growth in Eliquis, used to treat blood clots, and Ibrance which is used to treat breast cancer.

More promisingly, Pfizer raised its annual revenue forecast slightly to between USD48.6 billion to USD50.6 billion, from the previous range of USD48.5 billion to USD50.5 billion.

The pharma stock was up 3.0% on Wall Street.

Fast-food chain McDonald's Corp said its second-quarter earnings tumbled due to restaurant closures and "dramatic changes in consumer behaviour".

Revenue in the quarter ended June 30 fell 30% to USD3.76 billion from USD5.41 billion. Net income tumbled 68% to USD483.8 million from USD1.52 billion.

For the whole of the first half, revenue dropped 19% to USD8.48 billion with net income falling 44% to USD1.59 billion.

The stock was down 2.2% in New York.

Brent oil was quoted at USD43.09 a barrel at the London close, up from USD42.47 at the close Monday.

The economic events calendar on Wednesday has Germany import and export prices at 0700 BST and UK mortgage approvals at 0930 BST.

The UK corporate calendar on Wednesday has interim results from drugmaker GlaxoSmithKline, lender Barclays, miner Rio Tinto, housebuilder Taylor Wimpey and from luxury carmaker Aston Martin Lagonda.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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