FTSE indexes climb as housing plan boosts builders

The main UK stock indexes climbed on Tuesday, as house builders were lifted by the British government’s plans to spend £10 billion on lower-cost housing, while investors awaited key events later in the week.

The blue-chip FTSE 100 index rose 0.2% to 10,880.17 points by 1114 GMT, while the midcap FTSE 250 climbed 0.6% to 24,866.99 points.

Britain set out plans to spend £10 billion ($13.6 billion) on lower-cost housing for renters, with a focus on London. Around 60% of homes delivered through the funding would be for social rent, a subsidised cheaper form of rent that can be built by local councils or housing associations.

The homebuilders index rose 1.9% after the announcement. Vistry jumped 15.6%, leading gains in the midcap index, after it received initial funding of £350 million ($477.19 million) to deliver over 3,000 affordable homes as part of the plan.

Meanwhile, shares of energy majors BP and Shell dipped as oil prices fell more than 3%, with traders shrugging off the latest U.S. sanctions campaign against Iran, viewing the economic pressure as posing less risk to oil supplies than a military escalation.

Iran pledged to fight back against expanded U.S. sanctions aimed at isolating its economy.

Gold miners Fresnillo and Endeavour Mining fell about 1% after gold prices pulled back from recent highs as investor focus shifted to the upcoming U.S. inflation data as well as a speech later this week by Federal Reserve Chair Kevin Warsh at the Jackson Hole summit.

Investors are also closely watching chipmaker Nvidia’s earnings due Wednesday, viewed as a major test of the AI rally, amid concerns about whether the chipmaker can meet Wall Street’s lofty expectations.

Shares of Melrose Industries rose 9.7% after the GKN Aerospace owner said it was targeting September 28 to resume full production at its Garden Grove facility and pay up to $100 million to settle damage claims from a May incident involving an overheating chemical tank.