House builders rose after the activist Toscafund, run by Martin Hughes, the former banking analyst, revealed that it had raised its stakes in Redrow from 9.7% to 16.6% and in Taylor Wimpey from 5% to 10%, triggering the prospect of consolidation in the sector. The Times, Daily Telegraph
Bellway, seen as a potential merger partner for Redrow, was the biggest beneficiary, up 96p to 885p, which helped John Watson, its chief executive, and Peter Stoker, a director, to make a nice profit by selling share options exercised on Wednesday.
Redrow rose 25.5p to 314.5p, Taylor Wimpey climbed 10.75p to 187p and Barratt Developments gained 30.75p at 438p. In the FTSE 100, Persimmon jumped 52p to 789.5p.
Traders noted that the big volumes and price moves in house builders came in the early afternoon, signalling US hedge funds clearing out shorts ahead of the quarter end.