FTSE 100 movers: Berkeley leads builder rally, banks boosted by Basel 'reprieve'
London's benchmark index was on the front foot as the week ended, led by gains from housebuilders and banks amid a drop in the pound despite early news of a Brexit breakthrough.
Berkeley Group led the charge higher after reporting a strong set of interim results, beating City forecasts for house completions, profits and cash, while also upping its five-year profits guidance. Analysts at Numis upgraded 2018 and 2019 estimates by 3% and 5% respectively, adding that: "The news that Berkeley is taking a more cautious investment approach should also feed through to improved cash generation and we forecast that net cash by 2021 could amount to circa £1.2bn, even after the payment of its cash return pledge."
Furthermore there was positive news from the residential portion of the official construction output data from the Office for National Statistics on Friday. While UK construction output registered another sharp drop in October after contracting in both the third and second quarters, construction orders spiked a record 37.4% quarter-on-quarter, helped in part by a solid rise in orders for new housebuilding.
Fellow FTSE 100 housebuilders Barratt Developments, Taylor Wimpey and Persimmon were among those carried higher on the positive tides sweeping the sector.
Banks were higher after a surprisingly benign Basel regulatory update, which analysts suggested offered some "reprieve" for large UK banks. Lloyds Banking Group led the sector's risers, up 4% with RBS and Barclays both up more than 2%, as its large mortgage book seems to have escaped a regulatory shellacking.
Released late the previous day, the Basel III capital rules cooked up to prevent another global financial crisis, will see “no significant increase” in provisioning for big banks and may even see requirements decline for some. Analysts at RBC Capital Markets said Lloyds and RBS in particular benefited as operational risk parameters now include national discretion, so past misconduct will not necessarily be included in risk-weighted asset calculations.
Shire was higher as Citi reiterated its 'buy' rating and that it continued to believe the current share price "is discounting overly bearish scenarios for the hemophillia erosion curve as a result of Hemlibra". Moreover, Credit Suisse noted it comparative attractiveness versus Spain's Grifols.
Late in the day the company announcement that chief financial officer Jeff Poulton will still leave Shire at the end of the year but that until new appointment Thomas Dittrich can join the company some time in "early 2018", senior vice president of finance John Miller will be appointed interim CFO from 1 January.
Similarly Hammerson was lifted as Goldman Sachs said the shares offer 25% upside based on the agreed acquisition of shopping mall rival Intu. Analysts see a deal that will "significantly enhance" the company's power in a polarising market and generate "significant" efficiencies.
On the downside there were no company shares on the FTSE 100 index falling as much as 1%, with Intertek the biggest faller as profit taking continues to take the shares away from the autumn's all-time high.
Not dissimilarly, Informa was also retreating after its share prices last month reached heights last seen in the year 2000.
Market Movers
FTSE 100 (UKX) 7,382.96 0.85%
FTSE 250 (MCX) 19,962.74 0.77%
techMARK (TASX) 3,441.25 0.91%
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 4,180.00p 8.68%
Barratt Developments (BDEV) 634.60p 4.38%
Lloyds Banking Group (LLOY) 67.33p 4.37%
Shire Plc (SHP) 3,651.00p 3.35%
ITV (ITV) 163.80p 3.08%
Hammerson (HMSO) 523.50p 3.05%
Barclays (BARC) 197.25p 2.92%
Taylor Wimpey (TW.) 202.70p 2.84%
Persimmon (PSN) 2,679.58p 2.82%
NMC Health (NMC) 2,927.00p 2.74%
FTSE 100 - Fallers
Intertek Group (ITRK) 5,100.00p -0.78%
Informa (INF) 733.50p -0.61%
Rolls-Royce Holdings (RR.) 839.50p -0.47%
British American Tobacco (BATS) 4,936.00p -0.45%
Mondi (MNDI) 1,689.00p -0.41%
Relx plc (REL) 1,709.00p -0.35%
Sky (SKY) 994.00p -0.30%
Centrica (CNA) 144.40p -0.28%
SSE (SSE) 1,323.50p -0.26%
Coca-Cola HBC AG (CDI) (CCH) 2,319.00p -0.26%