(Sharecast News) - London's benchmark managed to break back into the green by the close after a choppy session on Tuesday, as investors weighed worries about a rise in new coronavirus infections against hopes of a US stimulus package, and a strong showing in the housebuilding sector.
The FTSE 100 ended the session up 0.4% at 6,129.26, and the FTSE 250 was ahead 0.7% at 17,278.23.
Sterling was stronger at the end of the day, last rising 0.43% on the dollar to $1.2938, and advancing 0.64% against the euro to €1.1032.
Equity markets had kicked the session off a little higher on optimism surrounding a $1trn stimulus package in the United States.
"Lately there has been increased chatter of another wave of the coronavirus, and that is chipping away at sentiment," said CMC Markets analyst David Madden.
"Governments have a far better handle on the pandemic now than they did in spring, but it seems as if economies can only be reopened to a certain level before the infection rate becomes an issue again."
Madden called it a case of two steps forward, and one step backwards.
"Stocks haven't tumbled too much as there are hopes the US government will publish a $1trn stimulus package in the next few days.
"As always with politics, a certain amount of arguing and negotiating can be expected, so talks between Republicans and Democrats are likely to drag on.
"There is a sense that a deal will be achieved in the end, but we will probably have to wait a while for it to be agreed upon."
Gains had evaporated by midday, however, as worries about the Covid-19 pandemic took hold again.
A growing number of cases in China, India and Spain, and a warning from Prime Minister Boris Johnson that businesses in the UK should prepare for a second wave, poured cold water on any earlier positivity.
Market participants were also digesting the latest survey from the Confederation of British Industry, which showed that retail sales rose a little in July after non-essential shops were allowed to reopen following the lockdown, although sales were expected to dip next month.
The balance of retailers reporting year-on-year growth in sales rose to +4 from -37 in June, coming in ahead of expectations for a balance of -25.
Although that was only slight growth on the year, it marked the best level since April 2019.
The improvement was driven mainly by stronger grocery sales, while sales of hardware and DIY products and other normal goods such as cards, flowers and stationary, returned to growth.
"It's great to see retail sales stabilise this month, but this doesn't tell the whole story," said CBI chief economist Rain Newton-Smith.
"This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak."
Newton-Smith said the re-opening of non-essential retail was "a vital step" towards recovery, but warned it wasn't a cure-all.
"The government has provided critical support for firms and jobs throughout the crisis.
"But ongoing financial pressures are a major challenge for some retailers, and additional direct support to shore up cash flow, such as extension of business rates relief, should be considered."
In equity markets, precious metals miners Fresnillo and Polymetal fell 1.49% and 1.66%, respectively, having surged on Monday alongside the price of gold.
Fresnillo was also in focus after it said higher commodity prices and lower costs had resulted in a "significant" rise in profitability during the first half.
Bakery chain Greggs in the red by 6.17% as it swung to a loss in the first half as sales fell after its shops were forced to close for three months due to the pandemic.
On the upside, housebuilders put in a solid performance, with Barratt Developments up 4.72%, Berkeley Group rising 4.99%, Persimmon adding 3.07%, and Taylor Wimpey 2.27% firmer.
The sector was boosted by a Financial Times report suggesting the Help to Buy scheme would be extended beyond its December deadline.
Consumer goods giant Reckitt Benckiser reversed earlier losses to close up 1.04%, after reporting a 10.8% jump in first-half net revenue as its hygiene business was boosted by solid demand for cleaning products amid the pandemic.
Education publisher Pearson gained 6.05%, having fallen sharply in the previous session on downbeat broker notes.
Miniature wargames manufacturer Games Workshop surged 10.88% after it posted a rise in annual pre-tax profit and revenue and hailed an "amazing" set of results.
Greencore advanced 11.2% after the Irish convenience food group reported a drop in third-quarter sales as its food to go categories were hit by the Covid-19 pandemic, but said trends were improving and announced the sale of its molasses businesses.
FTSE 100 (UKX) 6,129.26 0.40%
FTSE 250 (MCX) 17,278.23 0.70%
techMARK (TASX) 3,774.20 0.73%
FTSE 100 - Risers
Pearson (PSON) 543.20p 6.05%
Berkeley Group Holdings (The) (BKG) 4,694.00p 4.99%
Barratt Developments (BDEV) 541.00p 4.68%
Next (NXT) 5,242.00p 3.34%
Land Securities Group (LAND) 549.80p 3.31%
Persimmon (PSN) 2,536.00p 3.01%
Severn Trent (SVT) 2,490.00p 2.80%
United Utilities Group (UU.) 909.20p 2.44%
Taylor Wimpey (TW.) 132.95p 2.27%
JD Sports Fashion (JD.) 605.00p 2.16%
FTSE 100 - Fallers
GVC Holdings (GVC) 714.80p -2.27%
CRH (CRH) 2,944.00p -1.90%
Spirax-Sarco Engineering (SPX) 10,540.00p -1.82%
WPP (WPP) 592.40p -1.76%
Halma (HLMA) 2,207.00p -1.69%
Polymetal International (POLY) 1,908.00p -1.66%
BHP Group (BHP) 1,719.60p -1.64%
Antofagasta (ANTO) 1,049.50p -1.59%
Rio Tinto (RIO) 4,765.00p -1.53%
Fresnillo (FRES) 1,257.50p -1.49%
FTSE 250 - Risers
Greencore Group (GNC) 124.10p 11.20%
Games Workshop Group (GAW) 9,375.00p 10.88%
Sabre Insurance Group (SBRE) 277.50p 6.53%
TUI AG Reg Shs (DI) (TUI) 319.60p 6.18%
Centrica (CNA) 50.98p 5.97%
Provident Financial (PFG) 175.00p 5.93%
Savills (SVS) 768.00p 5.21%
Future (FUTR) 1,372.00p 5.05%
Bellway (BWY) 2,766.00p 4.89%
Energean (ENOG) 566.00p 4.74%
FTSE 250 - Fallers
Greggs (GRG) 1,368.00p -6.17%
Aggreko (AGK) 416.40p -3.12%
Plus500 Ltd (DI) (PLUS) 1,186.50p -3.02%
Hochschild Mining (HOC) 273.20p -2.91%
Just Group (JUST) 45.80p -2.88%
Apax Global Alpha Limited (APAX) 155.60p -2.75%
Morgan Advanced Materials (MGAM) 218.50p -2.69%
Howden Joinery Group (HWDN) 528.60p -2.54%
Liontrust Asset Management (LIO) 1,255.00p -2.33%
Synthomer (SYNT) 303.00p -2.32%
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