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* FTSE 100 up 0.4 pct
* Bellway update boosts housebuilders
* easyJet rises after upgrade
* Banks, GKN, Ashtead among fallers
By Kit Rees
LONDON, June 14 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 0.4
percent to 7,528.33 points by 0912 GMT, while the mid caps
gained 0.8 percent.
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
"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 4.5 percent 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 percent to 2.3 percent.
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.
Budget airline easyJet also enjoyed gains, its
shares advancing 1.2 percent following a supportive note from
Davy Research which upgraded the stock to "neutral" from
"underperform", citing its higher operating leverage in the
"We believe that the European low-cost carriers will
continue to see improving pricing trends as we approach peak
summer, albeit a consensus among the airlines has yet to form on
whether pricing will be positive or negative," analysts at Davy
said in a note.
Only a dozen or so more cyclical stocks such as banks Lloyds
and Standard Chartered and energy stock
were in negative territory on the FTSE, while equipment hire
firm Ashtead dropped 2.8 percent, extending losses from
the previous session after its earnings update.
"Strong FY17 results, but no consensus upgrades, saw a muted
investor reaction and we see more downside from here," analysts
at UBS said, adding that accelerating competition and slowing
end markets this summer could leave Ashtead's valuation exposed.
Likewise shares in engineering group GKN also came
under pressure after Panmure cut its rating to "sell" from
"hold", on the back of challenges in the U.S. auto and Middle
East aircraft markets.
(Reporting by Kit Rees; Editing by Keith Weir)