Market overview: Homebuilders lead drop amid recession chatter

1630:Close Stocks jumped at the start of the week, led by rocketing basic resource stocks as some analysts referenced better indications for China´s construction and infrastructure markets and supply factors. Nonetheless, the Footsie underperformed its continental peers as cable registered its largest one-day slide since 2009 and shares in homebuilders weighed. To take note of, strategists at Liberum reportedly told clients to watch "ultra-cyclical" shares such as those of banks and homebuilders, as those were the first one to show signs of weakness in 2008. Earlier in the session, iron ore prices recovered to $50 a tonne, making for gains of almost 30% from their December lows, alongside gains in oil and copper futures. The pound meanwhile fell by the most since 2009, although some investors saw an opportunity in the making. FTSE 100 up 87.50 points to 6,037.73.

1542: Shares of homebuilders are at the bottom of the pile ahead of Persimmon´s finals due out tomorrow and perhaps also as a result of weakness in the pound, which in the very short-term might deter some foreign buyers.

1500: Markit´s US manufacturing sector PMI retreated from a reading of 52.4 for January to 51.0 in February, its weakest print in over three years.

1354: Cable is now down 1.95% to 1.4079.

1318: Liberum´s head of strategy and stock selection, Sebastian Jory, has reportedly warned clients the risk of an imminent UK recession has almost certainly risen in the last six months. His recommendation is that investors keep track of "ultra-cyclical" shares such as those of housebuilders, real estate, banks and financial firms. Theirs were the first to show signs of weakness in 2008. In his opinion, the structure of the UK economy had not changed much since, with finance and the housing market playing outsized roles.

1241: Iron ore is back at the $50 mark, alongside gains of 3.76% for front month Brent crude futures which are now at $34.30 per barrel on the ICE.

1211: The latest equity strategy note from Jefferies, coinciding with news that London Major Boris Johnson will back the campaign for the UK to leave the European Union, suggested there was no evidence the risk of Brexit was curtailing investment intentions.

1210: Credit Suisse bumps up its target on ABF to 3,450p from 3,250p.

1053: Eurex group says on its Twitter account: "In order to avoid any threat to the functioning of exchange trading, on-exchange trading in Eurex has been suspended until further notice."

0958: Analysts at JP Morgan have revised their three-year long underweight stance on UK equities, moving to an overweight and saying that the risk-reward relationship has improved. "UK is a high-yielding, liquid market that typically does well in a challenging global backdrop and in a falling bond yield regime. UK DY ex Energy is 4.1%, 1.5x the MSCI World. Defensives dominate in the UK," the broker´s equity strategy team said.

0930: European equities extended their recent rally as crude oil futures bounced back and Chinese equities gained overnight, but the Footsie was underperforming, possibly due to the increased uncertainty surrounding the upcoming 23 June vote on EU referendum. Miners were in the lead early on. The pound was 1.37% lower versus the US dollar at 1.4163, its largest fall in 11 months against the greenback. FTSE 100 up 70.72 points to 6,020.75.