Housebuilders lead bounce back from Monday’s market sell-off

Global stock markets have continued their recent rollercoaster ride as investors appear uncertain what to do with their money in the face of surging Covid-19 cases.

In London the FTSE 100 reversed its heavy losses from Monday, led higher by a mix of housebuilders and natural resources companies.

The index closed up 1.4%, ending the day on 7297.41 points, a rise of 99.38.

The climb was in part led by some of the country’s biggest construction groups. Taylor Wimpey, Barratt Developments and Persimmon all showed a strong performance.

They were helped by data from HM Revenue and Customs which showed that house sales rebounded in November after an October lull.

JD Sports was also a strong performer, helped by results released in the US which showed Nike shoes are selling well.

In Europe the Frankfurt-based Dax index and Paris’s Cac 40 both closed up 1.4%.

“European markets have rebounded strongly today, with the FTSE 100 reversing all its Monday losses,” said CMC Markets analyst Michael Hewson.

“It could be that a reluctance on the part of governments to impose new strict lockdown measures this side of Christmas might be helping sentiment on the margins, however one can’t help feeling this might be down to the fact that even if restrictions were imposed there is little likelihood they would be observed by increasingly pandemic weary populations.

“There is perhaps a feeling that any new measures might be easier to push through after the Christmas festivities have passed.”

He added: “A rebound in commodity prices is helping to foster a rebound in the big caps of basic resources and oil and gas, however we’re also seeing decent gains in consumer discretionary as well.”

In New York the S&P 500 had gained 0.7% and the Dow Jones was up by 1.1% as markets were closing in Europe.

On currency markets, the pound gained 0.1% against two major foreign currencies and could buy 1.3251 dollars or 1.1761 euros.

London’s listed companies released little big news on Tuesday, however Schroders, the asset management firm, said it would take over Greencoat Capital, a renewable investor.

The FTSE 100 firm, whose shares rose 3.1%, said that the £358 million deal would give it a three-quarters stake in Greencoat, which manages £6.7 billion worth of assets.

Schroders said it wants to be a global leader in green investment and it will enhance Greencoat’s growth.

Naked Wines, meanwhile, said that it will start shipping into Alabama, its 43rd US state, after lawmakers there changed rules to allow out-of-state sellers to ship wine to customers.

The change follows recent moves by legislatures in Kentucky and Oklahoma. Shares in Naked Wines dropped by 1.1%.

The biggest risers on the FTSE 100 were IAG, up 9.04p to 139.98p, Informa, up 23.6p to 499p, Melrose Industries, up 7.1p to 151.9p, AB Foods, up 85p to 1997p, and JD Sports, up 8p to 336.6p.

The biggest fallers on the FTSE 100 were Ocado, down 46p to 1636.5p, United Utilities, down 122p to 4968p, Auto Trader, down 12p to 708p, Unilever, down 41p to 3940.5p, and Sage, down 8p to 815.2p.