By Steve Goldstein
U.K. blue chips rose on Tuesday on optimism over the likelihood of a decisive U.S election, with the home-builder sector rising after a strong corporate update.
Up 1.4% on Monday, the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.38% rallied 1.7%.
Some traders were moving to price in a decisive Democratic sweep in the U.S. election. Opinion polls suggest former Vice President Joe Biden has a sizable lead over President Donald Trump, and that control of the U.S. Senate will swing back to the Democrats.
Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA +1.01% rose 2% as Morgan Stanley lifted the oil company to overweight from equal-weight, saying its new financial framework and dividend policy send a strong signal about management’s confidence in the firm’s cash generating ability. BP /zigman2/quotes/202286639/delayed UK:BP +1.54% gained 3% as Morgan Stanley lifted its rating to equal-weight from underweight, arguing concerns about its uncertain and cash flow outlook are now priced in.
Home builders rose as Crest Nicholson said its adjusted pretax profit will be at the upper end of its previous £35 million to £45 million range, and “significantly ahead” of the £37.9 million consensus. It said current sales rates remain robust and slightly ahead of the pre-spring lockdown level.
Crest Nicholson /zigman2/quotes/207992108/delayed UK:CRST -1.16% shares jumped 16%, while Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW +0.71% shares rose 4% and Barratt Developments /zigman2/quotes/209812640/delayed UK:BDEV +0.08% rose 3%.
Associated British Foods /zigman2/quotes/204493701/delayed UK:ABF +0.40% slipped 1%. The maker of Ovaltine and Mazola and operator of Primark stores reported a 28% drop in adjusted operating profit on a 12% drop in sales for the September-ending fiscal year and didn’t pay a dividend. It is going to keep adding selling space at Primark, and it expects a higher profit from its sugar business.