LONDON: London’s FTSE 100 climbed on Wednesday, helped by heavyweight financial stocks and strong corporate earnings updates, although investors’ mood remained cautious over rising COVID-19 infections and risks of higher inflation.
The blue-chip FTSE 100 index rose 0.4%, with homebuilder Taylor Wimpey being the top gainer, while financial stocks Prudential, Legal and General, and Barclays were among the top boosts to the index.
Taylor Wimpey gained 6.1% as it joined bigger rivals in forecasting sustained demand and projected annual operating profit above the top end of market consensus.
“If things carry on like this, Taylor Wimpey could be one of the pandemic’s biggest winners. The group was bolder than some of its peers with an aggressive land-buying strategy that will pay off if the market remains buoyant,” said Laura Hoy, an analyst at Hargreaves Lansdown.
The FTSE 100 began the month on a strong note and is set to gain for the third straight session, supported by robust earnings and dividend cheer, as investors straddle the fence between inflation concerns and re-opening optimism. The domestically focused mid-cap index inched 0.2% higher, with travel and homebuilder stocks leading the gains.
Builder Bellway was the top mid-cap boost, rising 1.7%. “Another set of strong results from the UK’s housebuilders adds to mounting evidence that the pandemic has been a tailwind for the housing market,” added Hoy.
Homebuilders have gained nearly 2.3% this year as it saw higher demand for homes amid lockdowns and government tax breaks, although a survey last month pointed towards a cooling housing market. Among other stocks, Legal & General gained 2.4% after it posted an above-forecast 14% rise in first-half operating profit and said it saw continued strong growth.
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