Sector movers: Retailers, housebuilders lead London market higher

Housebuilders and retailers notched up decent gains on Wednesday, while resource stocks slipped lower as calm returned to the London market.

The FTSE 100 closed 0.71% or 40.11 points higher at 5672.30, while the FTSE 250 ended 1.28% or 195.61 points higher at 15,512.54. Precious metals retreated as US Federal Reserve Chairwoman Janet Yellen delivered her semi-annual testimony to the country’s Congress.

In prepared remarks for her semi-annual testimony to Congress on US monetary policy, Yellen said the slowdown in China could weigh on the US and the outlook for the country's inflation is falling.

“Financial conditions in the US have recently become less supportive of growth, with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar,” she added.

At 1724GMT, the front-month COMEX gold futures contract was down 0.38% or $4.60 to $1,194.00 an ounce, while spot gold was up 0.24% or $2.82 to $1,191.95 an ounce. COMEX silver fell 1.35% or 21 cents to $15.24 an ounce, while spot platinum fell 0.01% or seven cents to $903.75 an ounce.

Headline base metal futures were largely in positive territory on the London Metal Exchange at 1635 GMT. Three-month futures contracts of copper (up 0.5%), lead (up 1.3%), zinc (up 2.0%) and primary aluminium (up 0.5%) headed higher, but nickel (down 0.9%) faltered.

Meanwhile, oil prices saw a marginal recovery after the Energy Information Administration – statistics arm of the US Department of Energy – reported commercial crude inventories fell by 754,000 barrels to a total of 502m barrels last week. Market expectations were in the region of 3.6-3.7m barrels.

At 1743 GMT, the Brent front-month oil futures contract was up 3.76% or $1.14 to $31.46 per barrel, while WTI was up 0.54% or 15 cents to $28.09 per barrel.

However, resource stocks still strayed lower. Randgold Resources (down 3.74%) and Antofagasta (down 3.04%) were among the biggest FTSE 100 fallers, while Tullow Oil (down 8.54%) and Nostrum Oil & Gas (down 5.82%) registered the biggest losses on the FTSE 250.

In a trading update, Tullow Oil said revenues had fallen 27% for the year from $2.21bn (£1.52bn) in 2014 to $1.61bn, due to the fall in oil prices.

Its pre-tax operating cash flow also fell 38% from $1.55bn to $967m while gross profit fell 46% from $1.10bn to $591m. However the company had pegged back its full-year loss from $1.97bn to $1.09bn in 2015. Finally, Glencore fell after Societe Generale downgraded the stock to 'hold' from 'buy'.

Away from resource stocks, housebuilders were on the rise, including Taylor Wimpey, Berkeley Group Holdings and Barratt Developments, after sector peer Bellway reported strong growth in first half housing completions, saying it remains on target to deliver a 10% rise in full year volumes.

Supermarket giant Tesco (up 4.32%) gained after it bought the remaining stake in coffee chain Harris & Hoole it did not already own. Continuing with retail, homewares retailer Dunelm Group (up 13.27%) rallied to lead the FTSE 250 gainers after it declared a special dividend payment and reported a solid first half of the year, followed closely by Ocado (up 7.53%).