Market Report

Banks and housebuilders up as FTSE100 hits record

Retail investors may get a ‘bonus share’ in NatWest

Banks were in high demand as investor sentiment was boosted by strong first quarter figures from UBS.

NatWest, trading north of the border as Royal Bank of Scotland, was 7p higher at 312p after it was reported that as part of the government’s forthcoming sale of the taxpayers’ shares, retail investors could receive a “bonus” share in the bank if they hold on to the stock for at least a year.

Shares in Barclays were 8p higher at 210.25p while Lloyds Banking rose 1.5p to 53.75p.

Housebuilders rose to the top of the blue-chip risers’ board, buoyed by expectations that the market is treading water until mortgage rates fall and buyers return in meaningful numbers.

Persimmon rose 47.5p to 1414p. Barratt Developments added 14p to close at 492.75p, while estate agency Savills gained 34p to end the day at 1142p.

The FTSE 100 was up 100.18 points, or 1.2%, to a new record close of 8,313.67, its eighth record high so far this year. 

Shares in Glasgow packaging group Macfarlane fell nearly 10% after it said sales were 9.5% lower than the same period last year, though the impact on profits was offset by “strong gross margins and the benefit of acquisitions”. The shares closed down 9.86%, or 14p, at 128p.

Danni Hewson, AJ Bell head of financial analysis, said: “London’s blue-chip index scaled new heights today as optimism about the mid-term rate hiking cycle powers investor sentiment.

“There has been no shortage of plot twists in the year to date but at the moment markets are banking on the economic climate reaching that perfect temperature to allow rate setters to finally pivot.

“Whilst the Bank of England MPC is the last of the pack to meet, market sentiment is pretty much wedded to the expectation that nothing will change this time around.

“Less than ten percent believe a cut is on the cards come Thursday but, after continued weakness in the retail sector and inflation which seems to still be heading in the right direction, there will be plenty of eyes scouring between the lines when the minutes of the meeting are published.”

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