Hopes of end to policy vacuum in UK lifts real estate stocks

Real estate-related stocks and miners paced gains at the start of the week, with the former deriving support from news that Theresa May was set to become Prime Minister on the following Wednesday, helping to lift a tad of the uncertainty which had been weighing on the UK market.

Reports that Phoenix Asset Management Partners had increased its holdings in shares of select homebuilders, such as Barratt Developments and Bellway also helped to give the sector a boost.

According to Marketwatch.com, since the referendum vote the fund had raised its holdings in Barratt from 7.1% of the housebuilder´s share capital to 10.5% and that in Bellway from 11.2% to 12.0%.

"The bounce in UK mid-caps is more than partly due to hopes that, with Remainer May as PM, talks with Europe may be smoother, while the disappearance of a summer leadership contest has helped clear road ahead for UK equities.

"Before everyone gets too excited, it is important to remember that this week sees the start of earnings season. Alcoa’s update will be duly over-analysed for clues about earnings for the rest of the market, but at least the steady flow of company news will give investors something else to focus on besides the seemingly-unending focus on Brexit," IG´s Chris Beauchamp told clients.

"The [share] prince was a good opportunity. Nothing has changed in [house-building] fundamentals," Tristan Chapple, head of research at Phoenix Asset Management Partners reportedly said.

Gains in miners, on the other hand, were most closely linked to speculation of further easing from the Bank of Japan.

Not to be missed either, in recent weeks many analysts had begun to consider the possibility that the European Central Bank would not be far behind.

Indeed, following the Brexit vote the Bank of England was seen cutting Bank Rate again as soon as the following Thursday.

As of 19:00 BST Comex-traded September 2016 copper futures were higher by 1.27% to reach $2.1460/lb..