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Upbeat economic news buoys FTSE 100 Index

Published: 08:36 07 Jul 2016 EDT

Two cogs

A rare dose of good news in the UK after the EU referendum vote helped to keep the FTSE 100 Index firmly in positive territory on Thursday.

Housebuilders drove the Footsie 73.14 points higher to 6536.73 as house prices surprised on the upside last month.

Halifax said prices rose 1.3% in June following a 0.6% increase in May and a 0.8% dip in April.

But the mortgage bank cautioned that the data was collected before the UK’s EU referendum on June 23.

It also pointed to evidence of an underlying slowdown in price growth, with the year-on-year figure moderating to 8.4% in the three months to June.

Howard Archer at IHS Global Insight said: “We believe the housing market’s prospects have deteriorated markedly following the ‘Brexit’ vote.”

Housebuilders shrugged off the rising toll of City institutions halting redemptions from their property funds – now seven in total - in the wake of the referendum.

Persimmon PLC (LON:PSN) was the industry’s top riser with a gain of 3.88% to 1339p, followed by increases for Taylor Wimpey PLC (LON:TW.), Land Securities PLC (LON:LAND) and Barratt Developments PLC (LON:BDEV).

Manufacturing and industrial production figures came in better than expected, both at -0.5% against the -1.2% and -1.0% forecast respectively, although analysts said that could change.

Archer added: “Following the referendum result to leave the EU, it seems highly likely that the UK economy will suffer markedly for some time with negative repercussions for manufacturers.”

Traders also took a breather from fretting about the implications of the referendum more generally, with smaller company indices all making progress.

The FTSE 250 Index, hit hard in the last few days due to its preponderance of UK-focused companies, rose 196 points to 15866.

The FTSE AIM 100 increased 5.48 points to 3314.31 and the FTSE AIM All-Share lifted 0.87 points to 697.86.

Boxhill Technologies PLC (LON:BOX) climbed 24% to 0.23p after it said it would update the market about winding-up petitions against the company, which it has previously said it believed were totally without legal merit, before the close of trading on Friday July 8.

Shares in Stratmin Global Resources PLC (LON:STGR) pared a 25% gain but still advanced 8.33% to 1.63p as it agreed to sell 93.75% of the issued shares of Graphmada Mauritius to Bass Metals Limited for up to A$15.25mln.

Capital Drilling Limited (LON:CAPD) ticked up 8.8% to 37p on news that trading continued to show positive signs of improvement in the first half.

But Portmeirion Group PLC (LON:PMP) fell more than a fifth to 855p as the tableware maker forecast pre-tax profits materially below the record £8.6mln in 2015, due to falling demand in Asia.

Keras Resources PLC (LON:KRS) dimmed 6.38% to 1.1p after the Australian gold miner outlined a series of hurdles it would face in starting mining at its Prince of Wales underground pit.

Back in the top flight, the top winner was Associated British Foods plc (LON:ABF) up 9.5% to 2,796p. The group said it was sticking to its plans to expand the Primark clothing chain across Europe and the US, and was optimistic about its continued growth despite 'Brexit' uncertainty.

The biggest loser was Randgold Resources PLC (LON:RRS), down 1.7% to 9550p, as more upbeat market sentiment slowed the flight to gold as a safe haven.
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Preview at 6.58am

London’s shares are set to start on the front foot, after a solid showing by US markets last night.

Spread betting quotes indicate the FTSE 100 will open at around 6,533, after closing at 6,464 on Wednesday.

In the US, the S&P 500 advanced 11 points, or 0.5%, to 2,100, after the release of the minutes from the meeting of the Federal Reserve’s policy makers, which showed that the Federal Open Market Committee remains committed to keeping its options open.

Towards the close of trading in Asian markets, the Nikkei 250 was off 83 points at 15,296 in Tokyo while in Hong Kong the Hang Seng was up 158 points, or 0.8%, at 20,653.

On the economic front today, UK industrial production figures are due out while the Halifax House Price Index might feature prominently in news reporting today.

The European Central Bank will release the minutes from its most recent meeting of its policy makers.

• Sterling: US$1.2975, up 0.46 cents

• Gold for August delivery: US$1,370.70 an ounce, up US$3.60

• Brent crude for September delivery: US$48.92 a barrel, up 12 cents

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