What to watch: Redrow soars, UK house prices leap, US election lifts stocks

Tom Belger
·Finance and policy reporter
·4-min read
New-build residential homes are pictured during construction at a Redrow housing development, stalled due to the COVID-19 pandemic, in Arborfield near Reading on May 1, 2020. - Construction work has stopped since the UK has been under lockdown. However, the government will release a series of papers next week outlining its approach on how to safely and gradually restart the economy. (Photo by ADRIAN DENNIS / AFP) (Photo by ADRIAN DENNIS/AFP via Getty Images)
A Redrow development earlier this year as its orders have soared. Photo: Adrian Dennis/AFP via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

US election fuels weekly gains for stocks

European stocks slid and Wall Street looked set to open lower on Friday, after the best gains in months on Asian markets overnight as investors weighed up the US election race.

Leading indices in Europe opened higher but quickly fell firmly into the red. The FTSE (^FTSE) in London was down 0.5%, Germany’s Dax (^GDAXI) down 1.1% and France’s CAC 40 (^FCHI) down 0.9% in mid-morning trading.

Coronavirus concerns appear to be weighing on European stocks, with alarm over record infection numbers in France and Italy on Thursday.

Michael Hewson, chief market analyst at CMC Markets UK, said it would also “seem prudent to take some money off the table as we head into the weekend” given continued uncertainty over the US election race.

WATCH: Risks facing the market as investors weigh up chances of stimulus

Neither candidate yet has the 270 electoral votes needed to make it to the White House, but Joe Biden looked closer to victory as the trading day got underway in Europe.

US stocks looked set for declines later on Friday after surging the previous day. Futures on the S&P 500 (ES=F) were 1.2% lower, Dow Jones futures (YM=F) 1% lower and Nasdaq futures NQ=F) 1.5% lower.

European and US stocks still look set for significant weekly gains however, and stocks elsewhere have rallied over the past five days. Investors have warmed to the prospect of a Biden victory but without the Democrat majority in the Senate that many had predicted ahead of polling day.

Analysts said Republican control in the Senate would curb Democrats’ ability to increase regulation and taxes on tech giants, boosting tech stocks in recent days.

But investors see also a Biden victory cooling tensions between the US and China and benefiting international trade, helping Asian stocks overnight. Japan’s Nikkei (^N225) closed up 0.9% to hit a 29-year high. In China, the SSE Composite Index (000001.SS) lost 0.2% on Friday but ended the week up 2.7%.

Redrow leaps on near-record order book

Shares in UK housebuilder Redrow (RDW.L) leapt around 3% on Friday, as investors welcomed its latest trading update ahead of its annual general meeting (AGM).

The company was one of the fastest risers on the FTSE 250 (^FTMC), with the index down in early trading.

Turnover was up 48% year-on-year in the 18 weeks to 30 October at £657m, while its total forward order book is “close to record levels” at £1.5bn. It marks a 10% increase in orders year-on-year, and Redrow continues to plan to reinstate dividends at its half-year results.

Average properties sold for £396,000, up 2% on a year earlier.

"We entered the new financial year in a position of strength and this has been reinforced with strong trading since the start of the year. There has been resolute demand for homes with more space to live and work as customers reflect on their lockdown experiences,” said chairman John Tutte.

UK house price growth tops £250,000 but momentum slows

Redrow’s statement came as new figures showed buyers paid more than £250,000 ($328,160) for the average UK home last month, breaching the quarter-of-a-million mark for the first time in history.

Halifax’s house price index, one of the longest-running and most closely followed gauges of the UK property market, shows prices were 7.5% higher in October than a year earlier.

It marks the highest rate of annual growth since mid-2016. Russell Galley, managing director of Halifax said the market continued to be “supercharged” by stamp duty cuts and soaring interest in moving amid the pandemic, fuelling unusually high levels of demand that has pushed up prices.

But new data from the lender published on Friday also provides the latest in a string of early signs that the significant momentum driving Britain’s property boom is starting to fray.

While growth is remarkably strong year-on-year, the pace of monthly price gains has slowed sharply over the past two months. Prices were up 0.3% between September and October, compared to 1.5% gains a month earlier and 1.7% the previous two months.