London midday: Resources stocks lift FTSE as housebuilders subside

London stocks continued to improve as Wednesday wore on, to recover most of the losses from the previous session by midday as commodities provided a boost and investors took heart from solid jobs data.

Just after midday, the FTSE 100 index was up 0.6% to 6,705.8, while the FTSE 250 was up 0.4% to 17,726.87.

Recovering oil prices after the heavy losses on Tuesday were also a boost, with West Texas Intermediate was up 0.5% to $45.14 a barrel while Brent crude was up 0.3% at $47.26.

UK employment levels are weathering the early post-Brexit period, official figures showed, with the unemployment rate remaining unchanged at 4.9% in August, with jobless claims rising and average weekly earnings growth slipping only slightly.

Office for National Statistics (ONS) data showed the claimant count rose by a bigger-than-expected 2,400 after July's first drop in five months, though this had little effect on the claimant count rate of 2.2%.

"Today’s UK jobs report for July supports holding off for now, with unemployment and earnings data showing no initial hit from Brexit," said analyst Craig Erlam at Oanda.

"Of course, this typically takes a little longer so we wouldn’t expect to see anything significant at this point. The small increase in the claimant count is a small concern although unless a trend forms, we shouldn’t get carried away with it. We’ve had a number of small increases over the last year as the pace of labour market improvement has slowed. This could just be another example of the slowdown."

With positive data emanating from China, including money supply and bank loan growth, Glencore led a cabal of commodities giants to the top of the FTSE leaderboard.

Housebuilders including Taylor Wimpey and Berkeley were lower after new housing minister Gavin Barwell gave a strong indication of a material shifting in housing policy, hinting that controversial Starter Homes scheme will be scrapped and the government will pursue policies to expand the public sector and private sector rental markets.

Analyst Robin Hardy at Shore Capital, who pointed out that housebuilders instead used the various government stimulus measures to create a golden trading environment with substantial benefits for margins, returns, cash flow and dividends, said the new policy direction "likely to see a change in the dynamics of the house builders’ profitability especially if there is any adjustment to the scope and scale of Help-to-Buy".

However, construction group Galliford Try was topping the 250 list as it hoisted its dividend 21% after posting a record annual profit thanks to strong growth at its housebuilding and regeneration units.

Elsewhere, Compass Group gained ground after JPMorgan Cazenove upgraded the stock to ‘overweight’ from ‘neutral’.

Going the other way, Ocado lost another 8%, sinking to its lowest point in a month after a downgrade to ‘underperform’ from ‘neutral’ from analysts at Exane.

Telecommunications company Sky nudged a touch lower after saying it has invested £1m in the Drone Racing League (DRL), which includes a distribution deal to show the league on the Sports Mix channel from October.

FTSE 250 homeware retailer Dunelm was little changed after reporting a rise in full-year profit and revenue as it grew its market share despite increasing competition, and lifted its dividend.

Market Movers

FTSE 100 (UKX) 6,705.45 0.60%
FTSE 250 (MCX) 17,726.71 0.37%
techMARK (TASX) 3,461.94 0.60%

FTSE 100 - Risers

Glencore (GLEN) 182.45p 3.05%
Anglo American (AAL) 803.80p 2.55%
BHP Billiton (BLT) 992.50p 2.52%
Fresnillo (FRES) 1,649.00p 2.30%
Admiral Group (ADM) 1,984.00p 2.22%
Antofagasta (ANTO) 491.30p 2.21%
3i Group (III) 629.50p 2.19%
Randgold Resources Ltd. (RRS) 7,515.00p 2.18%
St James's Place (STJ) 948.50p 1.77%
Legal & General Group (LGEN) 210.80p 1.64%

FTSE 100 - Fallers

easyJet (EZJ) 1,112.00p -1.94%
Taylor Wimpey (TW.) 151.20p -1.37%
BT Group (BT.A) 375.40p -1.09%
Micro Focus International (MCRO) 2,146.00p -1.06%
Berkeley Group Holdings (The) (BKG) 2,602.00p -0.91%
Burberry Group (BRBY) 1,263.00p -0.86%
Persimmon (PSN) 1,778.00p -0.67%
British Land Company (BLND) 625.00p -0.56%
Dixons Carphone (DC.) 370.50p -0.54%
Vodafone Group (VOD) 219.10p -0.52%

FTSE 250 - Risers

Galliford Try (GFRD) 1,204.00p 6.45%
Hochschild Mining (HOC) 267.30p 4.54%
Softcat (SCT) 330.50p 3.70%
Genus (GNS) 1,954.00p 3.55%
Vectura Group (VEC) 137.00p 3.24%
Ultra Electronics Holdings (ULE) 1,755.00p 2.81%
Spectris (SXS) 1,959.00p 2.78%
Evraz (EVR) 131.40p 2.50%
Polymetal International (POLY) 998.00p 2.41%
Just Eat (JE.) 543.50p 2.35%

FTSE 250 - Fallers

Ocado Group (OCDO) 255.90p -7.95%
Shawbrook Group (SHAW) 235.50p -3.25%
Countrywide (CWD) 229.70p -2.88%
PayPoint (PAY) 1,013.00p -2.60%
CYBG (CYBG) 253.00p -2.32%
Debenhams (DEB) 59.30p -2.06%
TalkTalk Telecom Group (TALK) 193.70p -1.92%
Go-Ahead Group (GOG) 2,037.00p -1.83%
Great Portland Estates (GPOR) 624.50p -1.73%
Virgin Money Holdings (UK) (VM.) 291.00p -1.72%