FTSE 100 watch: Footsie little changed as banks rise

Taylor Wimpey share price slides after trading update

FTSE 100 watch: Footsie little changed as banks rise

The UK benchmark index has been struggling for direction in today’s session, finding support in London-listed lenders. A drop in housebuilders meanwhile is weighing on the FTSE 100 following Taylor Wimpey’s (LON:TW) trading update.

Banks in demand

As of 12:11 GMT, the FTSE 100 index had given up 3.46 points to stand 0.05 percent lower at 7,727.56, having traded higher earlier in the session. London-listed lenders have been in demand in today’s trading, finding support in a rise in bond yields. Bailed-out Royal Bank of Scotland Group (LON:RBS) is currently leading the sector higher, having gained 3.35 percent to stand at 289.90p.

“When there’s movement in the bond yields, the UK banks do benefit from that in a number of ways. Firstly, they make higher revenues in terms of their returns,” John Moore, trader at Berkeley Capital, told Reuters. “We think UK banks could do quite well despite the uncertainty, purely because we see them as undervalued.”

Outside the banking sector, J Sainsbury (LON:SBRY) has jumped after reporting a rise in quarterly sales and lifting its profit guidance for the full year. Sainsbury’s shares are currently changing hands 1.49 percent higher at 252.10p.

Housebuilders sold off

At the other end of the spectrum have been UK housebuilders, whose shares have been sold off as Taylor Wimpey pointed to ‘wider microeconomic uncertainty’ in its trading update this morning. Taylor Wimpey’s share price currently stands 4.21 percent lower at 200.10p. Shares in peer Persimmon (LON:PSN), whose own trading update failed to entice investors in the previous session, meanwhile have given up 2.50 percent to stand at 2,647.00p.

The FTSE 100 index was 0.11 percent up at 7,739.69 points as of 12:29 GMT on Wednesday, 10 January 2018.

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