Homebuilders' gains and weaker sterling underpin FTSE rise
A rise in housebuilders underpinned gains on Britain's top share index on Wednesday following a well-received update from mid cap Bellway, with a weaker pound also lending support.
Britain's blue chip FTSE 100 index climbed 0.4pc to 7,528.33 points by 0912 GMT, while the mid caps gained 0.8pc.
While housebuilders were hit by a selloff in the immediate aftermath of the UK's general election, which resulted in a hung parliament, a trading update from Bellway eased investors' concerns as the firm said that demand did not slow in the run-up to the election.
"Housebuilders generally ... have been marked down because of fears over the UK economy, the UK property market, but actually the numbers that are coming out of these companies are still pretty reassuring," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
"There are a number of tailwinds that [the housebuilders] also have, one of which is extremely low interest rates, another of which is the chronic lack of housing in this country, and a third thing is the government help to buy scheme," Khalaf added.
Bellway's shares rose 4.5pc to a 1-month high, while blue chip peers Barratt Developments, Persimmon and Taylor Wimpey were among the top FTSE gainers, up between 1.9-2.3pc.
British large caps extended gains after sterling weakened following UK data which showed that earnings after inflation contracted at the fastest pace since 2014, highlighting the growing post-Brexit strain on households.