FTSE 100 slips as rate hike worries offset gains in homebuilders

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(Businesshala) – London’s FTSE 100 index fell on Wednesday as signs of economic growth intensified bets on an early rate hike, although gains in homebuilder stocks led by strong earnings at Barrett Developments helped limit losses .

FILE PHOTO: The offices of the London Stock Exchange Group can be seen in the City of London on December 29, 2017. Businesshala/Toby Melville/File photo

Homebuilders jumped 4%, their highest intraday gain since April 2020, with Barratt Developments Plc leading the pack, up 6%, after reporting sales above pre-pandemic levels and announcing that It was on track to meet its 2022 and medium term targets.

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“Housebuilders have found themselves in somewhat of a sweet spot. While the demand for the pent-up lockdown is starting to dwindle, people are still motivated to move and this has led to higher house prices. According to Barratt, this is enough to offset build cost inflation,” said Laura Hoy, an analyst at Hargreaves Lansdowne.

The blue-chip FTSE 100 index was down 0.2% at 0.920 GMT, with losses in miners and oil stocks, while a stronger pound, 0.3%, also weighed on the export-focused index.

Britain’s economy returned to growth in August after contracting for the first time in six months in July, keeping financial market bets on whether the Bank of England will start raising interest rates before the end of the year.

The BoE, which is facing a surge in inflation, is set to become the first major central bank to raise interest rates since the start of the pandemic. Investors are betting on a gain of 0.15% by December. [BOEWATCH]

The FTSE 100 is up nearly 10% on accommodative central bank policies so far this year, but is about 9.6% off its all-time high to underperform the broader European total which sits just 3% below its record low. .

The domestically focused mid-cap index rose 1.1%, with major gains in travel and leisure stocks.

UK fund manager Man Group rose 7.2% and its assets under management rose to a record $139.5 billion in the third quarter.

In volatile trade, SoftBank-backed online retailer THG dropped 2.7% as of 0922 GMT, extending losses after holding a presentation on Tuesday to assure investors it could reverse a recent slide in the stock price. .

Shares of Just Eat Takeaway is down 3.6% since February 2019, as its third-quarter orders failed to meet analyst expectations.

Reporting by Bansari Mayur Kamdar and Shashank Nair; Editing by Krishna Chandra Elurik

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