(Reuters) -The UK’s midcap index was on course to snap an eight-day losing streak on Monday as housing stocks rose on positive comments from brokerage Goldman Sachs, while investors awaited the UK government’s highly anticipated budget this week.
The FTSE 250 index of domestically oriented UK firms edged up 0.3%, bouncing from its longest losing streak in more than two years. The blue-chip FTSE 100 was up 0.1% by 1139 GMT.
Housebuilders such as Vistry and Barratt Redrow rose 5.3% and 1%, respectively, after Goldman Sachs started coverage of the sector with a “constructive outlook”, saying the upcoming budget will help remove some of the uncertainites surrounding the sector.
The midcap index has shed nearly 5% from its October peak amid a rout in global stocks as well as mixed messaging around the UK budget due to be announced on Wednesday.
Finance minister Rachel Reeves looks set to raise taxes by tens of billions of pounds for the second time since the election to stay on track to meet her borrowing targets, hoping to avoid a bond market selloff while also increasing welfare spending.
Reeves is no longer expected to break an election promise by raising income tax and will resort instead to increases in a range of other taxes.
Meanwhile, global stocks climbed after comments from a U.S. Federal Reserve official last week boosted expectations for a December rate cut. The gains followed a sharp pullback in equity markets on concerns over elevated valuations in AI stocks.
UK bank stocks climbed after Morgan Stanley estimated net interest income growth of 4% next year for European banks.
Standard Chartered climbed 2.5% after the brokerage upgraded the lender to “overweight” from “equal-weight.” Barclays added 1.6% after Morgan Stanley named it a top pick.
Among other stocks, advertising firm S4 Capital and M&C Saatchi plunged more than 8%, with the former hitting a record low, after the companies downgraded their annual profit and revenue outlooks.
Anglo American was little changed after global miner BHP abandoned a last-ditch effort to buy its rival.
(Reporting by Utkarsh Tushar Hathi in Bengaluru; Editing by Tasim Zahid)
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