FTSE extends gains as Taylor Wimpey trebles revenues
The FTSE 100 enjoyed another day of gains on continued strong earnings, this time from Taylor Wimpey (TW), which provided an upbeat outlook for the housing market.
The main market gained 0.44%, or 31 points, to trade at 7,137 as companies continued to report improving post-pandemic numbers.
Taylor Wimpey jumped to the top of the blue chips, gaining 3.6%, or 6p, to trade at 160p after the housebuilder almost trebled revenues to £2.2bn for the first six months of the year versus 2020, and an increase of 26.8% on 2019 numbers.
The rise was thanks to record home sales that prove the pandemic has been a tailwind for the property market, with a stamp duty holiday encouraging many to move, and working from home prompting people to re-evaluate their living arrangements.
Hargreaves Lansdown analyst Laura Hoy said if ‘things carry on like this, Taylor Wimpey could be one of the pandemic’s biggest winners’.
‘The group was bolder than some of its peers, with an aggressive land-buying strategy that will pay off if the market remains buoyant,’ she said.
‘The group will suffer if the economy stumbles in the wake of the pandemic, but so far the group is building from a strong base.’
Prudential (PRU) added 2.1%, or 29p, to trade at £14.07 after the insurer reported it was working with the Asian Development Bank on a plan to buy out coal-fired power plants in Asia in a bid to shut them down within 15 years and help developing countries achieve energy transition.
Scottish Mortgage (SMT) investment trust was also a winner this morning, gaining 2.1% to hit £13.37. The technology-heavy fund benefited from a strong showing in the US as investors flood back into tech stocks, which have been hit hard by a Chinese crackdown of late.
AJ Bell analyst Russ Mould said the FTSE 100 was continuing to fight back after a selloff last month.
‘If it can break the 7,217 intra-day high seen on 16 June, then the index would be trading at levels not seen since February 2020, when global markets started to crash as the pandemic spread,’ he said.
‘Hitting that level looks possible this summer in the absence of any major negative news to trouble investors.’
However, he added that markets are easily rattled and ‘there are plenty of reasons to remain cautious, such as many stocks trading on elevated valuations and the delta variant continuing to cause disruption’.
Investment trusts were also riding high on the FTSE 250, which was up 0.3%, or 69 points, at 23,358. The mid-cap index was led by JPMorgan European Discovery (JEDT), with the closed-end fund up 1.9%, or 10p, at 520p. It was followed by gambling group 888 (888), which added 1.9%, or 7p, to hit 520p.
European Assets (EAT) was up 0.77% at 144p after reporting a net asset value (NAV) total return of 13.4% for the six months to the end of June, against a 10.5% return from the EMIX Smaller European Companies index. Performance was boosted by technology stocks, with semiconductor stocks performing well.
JLEN Environmental Assets (JLEN) advanced 0.7% to 107p as the NAV ticked up on revised power price forecasts and above-forecast inflation. Solar portfolio generation was above target in the second quarter and anaerobic digestion was also ahead of target.