Daily market update: BP, Shell, Berkeley Group

The FTSE 100 started off on the front foot on Monday, supported by its limited tech exposure and heavyweight oil and gas names.

This put it on the right side of two major developments over the weekend. First, the pausing of training of OpenAI’s latest models on safety concerns led to selling in Asia, particularly for those pockets of the market exposed to artificial intelligence.

Second, there was renewed strength in oil prices after comments from President Trump that he had rejected Iran’s latest proposal to reopen the Strait of Hormuz. Although there are some hopes that negotiations will continue through the course of this week.

In London, housebuilders, banks and BP and Shell were among those making progress, while precious metals miners were firmly on the back foot.

Gold prices have slumped from their summer highs as investors have reacted to the stronger dollar – which makes the metal more expensive for non-dollar buyers – as well as to rising bond yields and the shifting trajectory of interest rates. Because it offers no income, gold can lose its shine when alternative asset classes are offering more generous returns.

Other parts of the mining sector were down in the dumps as industrial metals prices also slipped back.

Housebuilders

The prayers of the housebuilding sector have been answered with news of a revived scheme to support first-time buyers in getting on the housing ladder, helping to drive their shares sharply higher.

Executives in the sector have been calling for government help for some time. Housebuilders benefited materially from the Help to Buy scheme in the 2010s, the difference from today being that they also enjoyed a period with negligible build cost inflation and rising property prices, supported by ultra-low borrowing costs. The backdrop is now very different, with margins squeezed by a subdued housing market and significant inflationary pressures on input costs.

Nonetheless, the new ‘Your First Home’ scheme – with details to be laid out at the Budget on 28 October – is a welcome fillip for an industry which has been in the doldrums for much of the last five years. The government will hope the scheme helps meet its ambitious target of delivering 1.5 million homes over the course of the current Parliament.

The biggest gains in the sector were reserved for those who operate at the lower end of the housing market or across the spectrum, with higher end operator Berkeley seeing more modest gains. Suppliers and retailers with ties to the property market were also riding higher on the housebuilders’ coattails as they enjoyed this rare spot of positive news.