London open: Stocks rise as bond markets stabilise; housebuilders rally

London stocks rose in early trade on Monday as bond markets recovered, with housebuilders pacing the advance.

At 0835 GMT, the FTSE 100 was up 1.3% at 6,569.32.

Richard Hunter, head of markets at Interactive Investor, said: "There has been a pause for breath after the bond market sell-off stabilised, although inflation concerns remain near the surface.

"Those fears of inflation have certainly not gone away but attention has shifted back, perhaps temporarily, to the immediate positive drivers which could propel a strong economic rebound.

"More generally, the success so far of the vaccine rollouts and the pent-up consumer demand which has partly been due to enforced savings are preparing the ground for a spending spree later in the year. In the US, the increasing likelihood of the President’s proposed stimulus package could initiate a strong road to recovery."

In equity markets, housebuilders were the standout gainers, with Persimmon, Taylor Wimpey and Barratt Developments all sharply higher on news that Chancellor Rishi Sunak will unveil in his Budget this week a mortgage guarantee scheme to help first-time buyers.

As part of the scheme, the government will offer incentives to lenders which would mean that people would be able to buy properties worth up to £600,000 with a deposit of just 5%.

Elsewhere, AstraZeneca was also up following a report that it has sold its entire stake in Moderna for more than $1bn.

Ladbrokes owner Entain pushed higher after it raised its offer for Swedish rival Enlabs to SEK53 from SEK40.

Distribution group Bunzl fell even after it reported a rise in annual profit and increased its dividend as deliveries of Covid safety equipment offset a fall in business from the food and retail sectors.

Market Movers

FTSE 100 (UKX) 6,569.32 1.32%
FTSE 250 (MCX) 21,182.45 1.30%
techMARK (TASX) 3,985.22 1.32%

FTSE 100 - Risers

Persimmon (PSN) 2,693.00p 3.98%
Taylor Wimpey (TW.) 163.80p 3.93%
Barratt Developments (BDEV) 690.00p 3.85%
International Consolidated Airlines Group SA (CDI) (IAG) 199.30p 3.83%
BHP Group (BHP) 2,355.00p 3.77%
Pennon Group (PNN) 903.00p 3.32%
Polymetal International (POLY) 1,467.50p 3.24%
Antofagasta (ANTO) 1,839.50p 3.20%
Anglo American (AAL) 2,856.50p 3.03%
Scottish Mortgage Inv Trust (SMT) 1,168.00p 2.91%