Housebuilding shares were the stand out performers today as the London market made strong gains amid further falls in oil prices.
Shares in Barratt Developments jumped 25% after it emerged that investment group Polaris Capital Management had built a 6% shareholding in the company. The move prompted significant buying interest in firms such as Taylor Wimpey and Persimmon, which both enjoyed double digit percentage gains.
Oil prices dipping below 115 US dollars a barrel, despite the crisis in Georgia, also led to wider improvements, and the Footsie closed up 52.6 points at 5541.8.
A positive start for US shares on Wall Street, which continued gains seen on Friday, aided progress towards the end of the session.
Chief beneficiary in London’s top flight amid the better housing market sentiment was building supplies firm Wolseley, which does more than half of its business in the US. Shares jumped more than 13%, or 56.5p to 477.25p.
Housebuilders set the pace in the second tier, as investors eyed potential value in the beleaguered sector and digested a note from Goldman Sachs.
Barratt was the star of the show with its 25% gain, up 30.25p to 158.25p, but other rivals saw big improvements after Goldman Sachs increased price targets on the stocks. Persimmon added 40.75p to 410.5p, while Taylor Wimpey improved 7.25p to 58.5p. Bellway also joined the party, gaining 44.5p to 648p, with Bovis Homes lifting 42.25p to 480.25p.
Amid the buoyant mood, some retailers were on firmer ground. Marks & Spencer added 17p at 304p, and Sainsbury’s rose 14p to 374p.
Elsewhere, Royal Bank of Scotland shares climbed 8.5p to 249p amid reports the group had sold up to eight billion US dollars (£4.2bn) worth of loans to private equity firms. Lloyds TSB also advanced 12.75p to 330.75p.
Broadcaster ITV was a good performer, rising more than 6% or 2.8p to 47.6p thanks to talk of renewed interest in the group from Endemol. And a stronger dollar served to boost medical devices firm Smith & Nephew, which rose 28p to 628.5p.
Amid the cheaper oil prices, British Airways was up more than 2%, or 6.75p at 282.5p. Transport giant FirstGroup also added 20p to 564.5p.
One of the biggest top flight falls of the session came from Eurasian Natural Resources after Kazakhmys upped its stake in the company to 25% but said it was not planning a bid for the mining company. ENR fell 64p to 1060p, or 6%. Ferrexpo topped the board with a loss of 15.5p to 244.75p.
The rest of the sector was on the back foot, with Anglo American off 15p at 2677p and Rio Tinto 95p lower at 4590p.
The Footsie’s four biggest risers were Wolseley up 56.5p to 477.25p, ITV up 2.8p to 47.6p, Marks & Spencer up 17p to 304p and Carphone Warehouse which closed 11p ahead at 217p.
The four biggest fallers were Ferrexpo, down 15.5p to 244.75p, Eurasian Natural Resources down 64p at 1060p, Petrofac down 22p at 580.5p and Rio Tinto, which ended the day 95p lower at 4590p.