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UK stocks clock best day in nearly three-weeks on stimulus hopes

07/06/2020 | 12:41pm

By Shreyashi Sanyal

London stocks logged their best day in nearly three weeks on Monday, with cyclical stocks including banks leading advances on hopes of more stimulus to kickstart a battered global economy, while homebuilders jumped on a report of stamp duty cuts.

Persimmon, Barratt Developments and Taylor Wimpey gained as a report said finance minister Rishi Sunak planned to raise the property tax threshold to as high as 500,000 pounds ($623,700) in an attempt to exempt most homebuyers from paying any stamp duty.

Barratt also reported a higher order book value and said it was starting the new financial year with "cautious optimism".

"Cuts to VAT rates are perhaps the most straightforward way to increase demand and would provide a much-needed lifeline to the UK high street," said Tom Selby, senior analyst at AJ Bell.

The FTSE 100 was up 2.1% and the mid-cap FTSE 250 1.4%, also supported by bets the Chinese economy would boost global growth. [.SS]

Asia-focused lender HSBC jumped 6.6%, leading gains among banks, while construction stocks <.FTNMX2350> gained 1.7% as a survey showed growth returned to construction companies in June for the first time since the coronavirus lockdown began.

The FTSE 100 has rebounded more than 25% from a virus-driven crash in March, aided by historic global stimulus and improving economic data.

Prime Minister Boris Johnson has said he would set out a timetable this week for when the remaining sectors of the British economy would be allowed to reopen.

Insurer Aviva gained 3.6% as it said Maurice Tulloch was stepping down with immediate effect for family health reasons and named independent director and former Zurich Insurance executive Amanda Blanc as his replacement.

Online fashion retailer Boohoo tumbled 23% after a media report highlighted working conditions in one English factory.

(Reporting by Shreyashi Sanyal in Bengaluru; Additional reporting by Shashank Nayar and Sagarika Jaisinghani; Editing by Uttaresh.V and Alex Richardson)

© Reuters 2021
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