Housebuilders celebrate rising prices while travel shares droop
Spain said it will tighten restrictions on UK travellers.
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Your support makes all the difference.London’s biggest housebuilders helped ride to the rescue of a market that was otherwise subdued by its travel stocks, which entered a second day of decline.
Persimmon and Taylor Wimpey were boosted on Tuesday after news that house prices are rising at their fastest pace in 17 years.
They helped push the FTSE 100, London’s top index, to a positive result, ending the day up 14.58 points.
The 0.2% rise puts the index at 7,087.55, still around 100 points shy of the 16-month highs it reached earlier in June.
The index had taken a hit on Monday as travel stocks closed lower. German Chancellor Angela Merkel is reportedly trying to get UK travellers banned from the EU because of the country’s surging Covid cases.
On Tuesday the stocks continued their slides after the pain was amplified as Spain toughened restrictions on Brits coming to the country.
British Airways owner IAG, International Hotel Group, and airline Tui all notched up sizeable falls.
The exception that proved the rule was Whitbread.
The company owns Premier Inn, so is likely to benefit from a continued increase in domestic holidays.
Its shares rose 0.7%.
“Travel and leisure are once again feeling the heat after Spain removed UK visitors off their list for restriction free travel with TUI seeing the largest losses, with Ryanair, easyJet and IAG also lower,” said CMC Markets analyst Michael Hewson.
“There appears to be a growing realisation that for all the optimism over the UK’s vaccination progress, the travel sector will never recover properly until the rest of the world gets its act together when it comes to vaccines.
“Given how fast the Delta variant is spreading, there is increasing concern that the summer of 2021 could well go the same way as the summer of 2020, for the likes of Europe’s holiday sunspots, creating the potential for further problems for EU politics heading into year end.”
Markets in the US and Europe were also trading in the green.
As UK traders were preparing to go home for the day, the S&P 500 was up 0.1% and the Dow Jones had gained 0.3%.
The Dax in Germany closed up 0.9%, while the Paris Cac index rose 0.3%.
Currency markets were flat.
One pound could buy either 1.3834 dollars or 1.1622 euros at the end of the day.
In company news, office owner IWG lifted higher despite New York private equity firm CC Capital saying it would not make a takeover bid for the FTSE 250 business.
The company, which was formerly called Regus, poured cold water on reports of a possible £4 billion private equity bid but it was not enough to completely temper the hopes of giddy investors who believe other parties may still hold an interest.
Shares were up 7.5p at 307.7p at the end of trading.
Elsewhere, oil and gas services group Lamprell saw more than a quarter of its stock market value wiped after it warned over its future amid a funding crisis.
It closed 21.9p lower at 46p after it said it needed to raise up to 150 million US dollars (£108 million) by the end of the third quarter.
The biggest risers on the FTSE 100 were Just Eat Takeaway, up 257p at 6,875p; Johnson Matthey, up 76p at 3,097p; Evraz, up 12.8p at 612.2p; Ocado, up 43p at 2,062p; and Pershing Square, up 55p at 2,650p.
The biggest fallers on the FTSE 100 were Polymetal, down 52.5p at 1,562.5p; BT Group, down 4.35p at 195.5p; Rolls-Royce, down 1.92p at 98.58p; Fresnillo, down 14.6p at 786.4p; Standard Life Aberdeen, down 4.5p at 274.3p.