Tuesday 28 July 2020 4:10 pm

Markets live: FTSE 100 up but US stocks down amid stimulus hopes

The FTSE 100 rose but US stocks fell as coronavirus cases climbed around the world and Republicans and Democrats prepared to debate a new stimulus package amid new vaccine trials

The UK’s main stock index was 0.3 per cent higher in afternoon trading at 6,120 points after briefly slipping into the red. The FTSE 250 of slightly smaller shares was 0.6 per cent higher.

Read more: Gold hits all time high amid US-China tensions

In Europe, the German Dax gave up early gains to sit 0.2 per cent lower. France’s CAC was down 0.3 per cent but the continent-wide Stoxx 600 rose 0.3 per cent.

US stocks fell after some worse-than-expected company earnings and as doubts crept in about the latest round of talks over a fiscal stimulus package.

The S&P 500 slipped 0.2 per cent and the Dow Jones fell 0.5 per cent. The Nasdaq dropped 0.6 per cent.

FTSE 100 choppy but helped by housebuilders

The FTSE 100 was boosted by housebuilding companies today after the Financial Times reported that the government is set to extend the Help to Buy scheme beyond its December deadline.

The programme helps first-time buyers purchase a new-build property with a small deposit.

Berkeley Group was up 5.1 per cent in the afternoon. Barratt Homes had risen 4.6 per cent, Taylor Wimpey 2.8 per cent and Persimmon 2.6 per cent.

Read more: UK housebuilder stocks surge on Help to Buy extension reports

On top of the Help to Buy extension, “the recent stamp duty holiday [is] expected to spark a resurgence in demand,” said Joshua Mahony, senior market analyst at IG. 

Prime Minister Boris Johnson has also promised to relax planning rules and invest in affordable homes.

Rising cases speed up vaccine race

However, many FTSE 100 stocks exposed to the global economy fell as coronavirus cases continued to rise around the world.

US cases rose 1.3 per cent yesterday, although that was below the average 1.7 per cent gain last week. Spain’s coronavirus count continues to rise and cases have flared in Vietnam.

Miner Fresnillo led the FTSE 100 fallers, dropping three per cent. Advertising group WPP fell 2.6 per cent.

Read more: Government announces £100m funding for new coronavirus vaccine centre

The rise in cases has hastened the search for a vaccine, which has helped markets. Drug giants Pfizer, Moderna and Astrazeneca are all racing to produce a safe and effective treatment.

US stocks fall as earnings disappoint

Shares on Wall Street slipped amid worse-than-expected company results even as the FTSE 100 rose. McDonald’s, 3M and Harley Davidson all missed expectations. 

The fast food giant’s total sales plunged 24 per cent in the second quarter. Its shares slipped 2.4 per cent on the S&P 500.

Earnings season is now in full swing, with tech titans Apple, Amazon, Alphabet and Facebook all reporting this week. That has led to some nerves among investors.

Read more: Google to build undersea cable between New York and Cornwall

US markets were also nudged off course by expectations the Federal Reserve will make some gloomy comments about the economy when its rate-setting meeting ends tomorrow.

On top of this, Senate Republicans agreed a $1 trillion (£780bn) stimulus package with the White House yesterday. But it faces strong opposition from Democrats who say it is not enough and from some Republicans, too.

Gold drops back after record surge

Investors’ main focus so far this week has been on gold and the dollar, however.

The metal yellow hit an all-time high of around $1,980 per ounce this morning. It came as investors looked for a higher rate of return than negative real bond yields and a hedge against inflation amid record levels of stimulus.

Read more: Dollar hits two-year low as US coronavirus cases surge

But the rally cooled as investors took stock of the huge price moves. It was last up 0.5 per cent to $1,950 an ounce.

The dollar slumped to a two-year low yesterday as rising coronavirus cases and Federal Reserve dovishness put pressure on the currency. It was roughly flat on the dollar index in the afternoon.