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7 months ago
Britain's FTSE spurred to new record by Persimmon's bullish update
January 5, 2017 / 9:48 AM / 7 months ago

Britain's FTSE spurred to new record by Persimmon's bullish update

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* FTSE 100 flat after touching new record

* Persimmon lifts housebuilding sector

* Mid-caps outperform after more strong economic data

* Downgrades to RSA, Rolls Royce weigh on FTSE 100

By Alistair Smout

LONDON, Jan 5 (Reuters) - Britain's top share index rose to a fresh record high on Thursday, boosted by a bullish update from housebuilder Persimmon, which reported a rise in sales despite Britain's vote to leave the European Union.

Britain's FTSE 100 touched a new record at 7,211.96 as it gained in early trading. The index has hit fresh record highs in three of the last four sessions.

Persimmon was the top gainer on the index, up 5.2 percent to its highest level since August.

It reported an 8 percent revenue rise, and said that the sales rate was up 15 percent between July and December, confounding the notion that the Brexit vote could take the wind out of property-related companies.

However, the stock remains down 9.2 percent since the referendum last June.

Sector peers also rose on Thursday, with Taylor Wimpey and Barratt Developments both up nearly 3 percent.

"This latest positive update from a sector major adds to yesterday's positive UK PMI Construction read and improving mortgage approvals data while the UK mortgage market remains highly competitive and government initiatives supportive," said Mike van Dulken, head of research at Accendo Markets.

"Although house price data does remain notoriously mixed, the post-Brexit crash foreseen by many simply hasn't materialised and prices held up remarkably well."

Bullish domestic data in Britain continued on Thursday, as the services sector grew at the fastest rate since mid-2015, even as costs rose as sterling weakened following the Brexit vote, an industry survey showed.

The survey put downward pressure on the FTSE 100, taking it down from highs, as strength in sterling impacted firms with international exposure.

The FTSE 100 was flat at 7,192.83 by 0935 GMT.

The domestically-exposed FTSE 250 mid-cap index outperformed the FTSE 100, rising 0.7 percent. It was supported by a 5 percent rise in BTG after the biotech firm received a "buy" rating from Panmure Gordon.

Weighing on the blue-chips were a handful of downgrades. Rolls Royce was the top faller, down 3.6 percent after JP Morgan cut their target price on the stock, warning that earnings would be "highly depressed" over the next several years.

JP Morgan separately cut RSA Insurance to "neutral" from "overweight", sending its shares down 2.2 percent.

Reporting by Alistair Smout; Editing by Keith Weir

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