LONDON, May 28 — British shares climbed today, led by gains in financials and homebuilders on economic recovery optimism, while investors awaited key US inflation data which has kept them on edge this week.

The blue-chip FTSE 100 index rose 0.4 per cent with banks and life insurers adding 1.5 per cent and 1.9 per cent, respectively. HSBC Holdings and Prudential provided the biggest boost.

Homebuilders jumped with Vistry Group and Taylor Wimpey gaining 2.5 per cent and 3.5 per cent, respectively.

Britain’s financial regulator said it would move to protect consumers from so-called “loyalty penalties” in motor and home insurance, potentially saving an estimated £4.2 billion (RM24.6 billion) over 10 years.

Advertisement

The domestically focused mid-cap FTSE 250 index inched 0.4 per cent higher and was set to outperform the blue-chip index for the second straight week with a 1.6 per cent gain.

“What we’ve seen in sort of anecdotal conversations, backed up by investor surveys, is the global asset allocators’ view of the UK is turning a bit more positive,” said Ian Williams, Peel Hunt’s economics & strategy research analyst.

“If you want to buy UK exposure, then you tend to go more into mid- and small-caps and a combination of a bit of takeover activity and decent earnings recently has been more helpful for them.”

Advertisement

The FTSE 250 is only down 0.6 per cent from a record high hit on May 10, as the British economy has reopened and data pointed to a stronger economic recovery in the second half of the year due to vaccine rollouts and constant policy support.

Asian shares rallied too as investors bet the United States will lead the world out of the pandemic, with the focus turning to a multi-trillion dollar spending boost by the Biden administration.

Among stocks, brewer C&C Group slipped 3.5 per cent to the bottom of the FTSE 250 index after Berenberg cut its price target on the stock. — Reuters