The FTSE along with other global indices was on the rebound on Wednesday, capitalising on the lack of trade war news to claw back some of the losses from the previous session.
Moving towards the close the FTSE was 0.5% higher, trading ahead of its European counter parts thanks to the charge in heavily weighted commodity stocks as they traced oil and metal prices higher.
Concerns that the US – Sino trade war would see China’s demand for metal reduced meant mining shares had contributed heavily to the decline of the FTSE in the previous session. Today bargain hunters were out in force buying back into the likes of Glencore and Fresnillo as metal prices recovered.
House builders dive on another profit warning
Berkeley group, despite reporting bumper earnings this year, warned that profits will be around a third lower in the coming financial year as house prices falter in London. Another profit warning for another home builder has sent shivers through the house building sector.
Berkley traded over 5% lower with other housebuilders such as Barat Developments and a Persimmon also dominating the lower reaches of the FTSE. Brexit related uncertainty in addition to low wage growth has meant that the property market in London and the Sour East in subdued at best.
Advantages of building on cheap land brought shortly after the financial crisis have now been capitalised, leaving a fairly bleak outlook; understandably investors are starting to move out of the sector which has been the star performer of the construction industry over the past few years.
May wins Brexit vote
The pound experienced increased volatility across Wednesday as traders focused on the Brexit Bill returning to the House of Commons, raising questions once again over Theresa May’s leadership credentials.
Another vote, another concession: May, managed to scrape together a win in Parliament on the meaningful vote amendment in the Brexit Bill, as it ping ponged back to the Commons- this sent the pound on a relief rally higher.
Brexit blues and concerns over May’s future at the helm had left the pound languishing at 7-month lows.
Now pound traders can shift their attention to the packed calendar tomorrow including the Mansion House Speeches and BoE MPC meeting.
The pound has already surged through $1.32, a more hawkish tone from policy makers tomorrow could see the pound look back towards resistance at $1.35.
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