The FTSE 100 was hanging on to gains on Monday afternoon after a rambunctious start to the trading week. The FTSE 100 surged in early trade before the rally faded into the afternoon.
The index was 0.15% higher at 7,270 shortly after 2pm in London. The FTSE 100 had touched highs of 7,317 earlier in the session.
Investors will be preparing for a raft of PMI manufacturing data and the Jackson Hole Symposium later this week.
“The FTSE 100 ticked higher on Monday despite an initially lukewarm reaction to Chinese policy measures aimed at righting a listing economy,” said AJ Bell investment director Russ Mould.
“Rate cuts did not go as far as anticipated but nonetheless oil and gas stocks were among the risers in London on the potential implications for demand of easier monetary policy in China.
“Later this week a flood of PMI data from Europe, the UK and US should provide some insight into the current economic trajectory in the West and serve as an hors d’oeuvre to the main course provided by the Jackson Hole symposium which starts at the end of the week.
“This meeting of finance ministers and central bankers will provide some insight into the thinking of the Bank of England, Federal Reserve and European Central Bank ahead of their next set of meetings this autumn.”
Global equity indices sank last week and if the FTSE 100 fails to hold on to gains today it will sap further confidence from traders.
Housebuilders sink
Housebuilders were facing the pressure of a profit warning from Crest Nicholson with Persimmon, Taylor Wimpey and Berkeley Group among the FTSE 100’s top fallers.
“Weak house price data is hardly a surprise. Economic uncertainty is elevated, mortgage costs have gone through the roof and the Help to Buy scheme has come to an end. However, Crest Nicholson’s profit warning has laid bare the scale of the impact of a housing slowdown on the housebuilding sector.
“Sales of new homes have plunged alarmingly and, while not all developers in the space are created equal, the news, allied to Rightmove’s latest reading on the property market, has had a knock-on effect on share prices in the rest of the sector this morning,” said Russ Mould
“The £7,000 drop in the average asking price observed by Rightmove in the last month, allied to a big drop in transaction volumes, is the kind of statistic to make estate agents distinctly uneasy.
“The scale of Crest Nicholson’s warning may come as a shock to investors given it reported its first half results just a couple of months ago and this hints at the speed and scale of the deterioration in the market.”
InterContinental Hotels was the FTSE 100 top gainer, up 2%.