Wednesday 22 January 2020 9:16 am

Housebuilders lead FTSE 100 bounce as coronavirus fears abate

The FTSE 100 rebounded this morning following its worst performance in two weeks on Tuesday, with housebuilders leading the blue chip index after Berkeley raised its planned shareholder returns.

The index gained 0.10 per cent in morning trading, led by Berkley. The company climbed as much as 5.40 per cent to hit a record high on news the company would boost shareholder returns by £455m. 

Fellow housebuilders Persimmon and Barratt Developments were among the FTSE 100’s risers, adding as much as 1.88 per cent and 1.44 per cent respectively.

Burberry weighed on the index, sliding as much as 3.76 per cent despite a bright Christmas trading update, while miner Antofagasta fell 2.61 per cent after its copper production was hit by civil unrest in Chile. 

But the blue chip index benefited from the easing of worries over the spread of a new coronavirus in China. 

Although the death toll from the virus, which is being likened to the 2002 to 2003 outbreak of Severe Acute Respiratory Syndrome (SARS), has risen to nine, markets have held firm as Chinese authorities step up efforts to get the outbreak under control. 

“There was some cautious optimism on Wednesday morning despite the risks associated with the Chinese coronavirus continuing to simmer in the background,” said AJ Bell investment director Russ Mould.

“Investors will be hoping this is not a repeat of the early noughties SARS virus which had a material impact on markets and global trade,” he added.

The FTSE 250 slipped 0.04 per cent in morning trading.

The FTSE’s continental peers made modest gains, with France’s CAC 40 edging into the green with a 0.05 per cent rise. 

Germany’s DAX was up as much as 0.23 per cent, and is on course for a record high today ahead of European Commission president Ursula von der Leyen’s address at Davos later today.