Wimpey-Woodrow proposed merger bolsters FTSE

Property stocks added some strength to the London market today after news of further consolidation in the housing sector buoyed shares.

The FTSE 100 Index held steady at 6351.4, a gain of 12 points, as higher oil prices also saw commodity stocks adding weight to the blue-chip index.

A merger proposal between second tier firms George Wimpey and Taylor Woodrow propelled housebuilder Persimmon to the top of the leaders’ board with a gain of 57p to 1457p. Hammerson was close behind with an advance of 29p to 1774p as traders highlighted the scarcity in UK landbanks.

Taylor Woodrow shares soared 16%, up 67.5p to 488p, while George Wimpey jumped 6%, or 38p to 673p. The tie-up between the two companies would create the UK’s biggest housebuilding firm.

Back in the top flight, a rise in oil prices to more than 62 US dollars a barrel boosted oil giants Royal Dutch Shell and BP. Renewed concerns regarding the situation in Iran and the possible ramifications for oil supply fuelled the price increase. Shell was 28p higher at 1698p, BP rose 5.5p at 547p and BG Group lifted 5p to 731.5p.

Mining stocks also featured high on the early Footsie risers board as BHP Billiton completed a £141m (208m) share buyback and Xstrata unveiled a £2bn (€3bn) offer for Canadian mining company LionOre.

BHP Billiton was ahead 20p at 1139p with Xstrata up 45p at 2623p with the rest of the sector benefiting to see Lonmin up 35p at 3327p and Rio Tinto 52p higher at 2933p.

Banking stocks led the Footsie fallers as Barclays, in merger talks with Dutch bank ABN Amro, fell 13.5p to 744.5p on the back of a broker downgrade from Dresdner Kleinwort. Royal Bank of Scotland also lost 30p to 2024p while Lloyds TSB declined 7p at 566.5p.