U.K. stocks advanced for the first time in seven sessions, rebounding from a 10-month low after U.S. bourses ended an extremely volatile session with their biggest gains in years. Home builders took part in the London rally on Wednesday, even after a downbeat report on the U.K. housing market in January. The FTSE 100 index rose 0.5% to 7,173.70, after closing at its lowest level since April last year on Tuesday. The pound fell to $1.3918 from $1.3950 late Tuesday in New York. U.K. stocks rose as part of a broader European upswing, which came after a severe selloff on Tuesday sent the region’s indexes to multi-month lows. That fall was prompted by a bloodbath for stocks on Wall Street on Monday afternoon, when the Dow Jones Industrial Average suffered its biggest one-day point drop ever. U.S. stocks, however, on Tuesday snapped back to close firmly in
positive territory, inspiring an upbeat trading mood in London on Wednesday. On a sector-specific basis, housebuilders were in focus after a report from lender Halifax showed house prices in the U.K. fell 0.6% in January month-on-month. On an annual basis, house prices rose 2.2% in the three months to January, down from growth of 2.7% in the three months to December. U.S. stock futures pointed to a day in red for Wall Street, with futures for the Dow Jones Industrial Average down more than 200 points. Among housebuilders, shares of Taylor Wimpey PLC rose 1.3% and Barratt Developments PLC climbed 0.9%. Severn Trent moved up 1.4% after the water utility company confirmed its 2018 outlook and said it has reduced financing costs. Shares of Tesco slipped 0.7% after reports the supermarket chain is facing a possible £4 billion compensation claim over equal pay. “Investors may take some time to really assess this as it has come out of the blue, but it appears to be a serious claim and one that clearly poses downside risks to the stock. Tesco’s market cap is around £16bn with underlying profits last year of £1.2bn, so a £4bn bill would be significant,” said Neil Wilson, senior market analyst at ETX Capital, in a note. Outside the FTSE 100 index, shares of Tullow Oil climbed 2.9% after the oil-and-gas explorer said its loss narrowed by 68% in 2017.
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