The FTSE 100 stage a recover on Thursday as London’s leading index bounced back from a period of selling sparked by a higher than expected US CPI print earlier this week.
The index rose as high as 7,326 on Thursday before falling to trade under 7,300, nonetheless still in positive territory.
Cyclical stocks led the rally with the UK banks among the top risers as investors positioned for higher interest rates in the near term.
“In the UK, the FTSE 100 traded 0.6% higher, with banking stocks leading the way. Lloyds and NatWest were among the biggest risers, no doubt driven by investor expectation of higher interest rates and how that might have a positive impact on the banking sector’s earnings,” said Russ Mould of AJ Bell.
Lloyds shares notably traded at the highest levels since May as investor positioned for higher earnings in the bank. Natwest and Barclays were also gaining and approaching the highest levels for some months.
The FTSE 100’s Housebuilder also found strength following positive announcements from Redrow and MJ Gleeson in recent days. The two sets of data complimented recent updates from Barratt Developments, Persimmon and Taylor Wimpey in as far as the trend of higher house prices were supporting revenues at a time questions were being asked of the strength of the Uk housing market.
MJ Gleeson shares rose 3% on Thursday following a record set of results from the affordable-housing specialist.
“Gleeson Land’s market remained robust throughout the year and the business delivered a strong result. Demand in the South of England for quality sites with sustainable and implementable residential planning permission remains strong and the division is well-placed to drive further sustainable growth,” said Dermot Gleeson, the MJ Gleeson Chairman on Thursday.
Rolls Royce
Rolls Royce were the FTSE 100’s top gainers as the engineering company announced the sale of ITP Aero for €1.8bn. The sale will provide Rolls Royce with a welcome cash injection to help pay down debt and strengthen the balance sheet. Rolls Royce shares were 5.7% higher at the time of writing.
Ex-Dividends
Hikma Pharmaceuticals and Melrose industries were among the FTSE’s fallers as the companies went ex-dividend. Triple Point Social Housing REIT and Murray Income Trust were notable investment trust ex-dividends on Thursday.