FTSE gains 33 points on positive construction and retail news

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Boosted by some positive news from both the UK retail and construction sectors, the FTSE 100 managed to maintain its morning run closing 33.5 points higher at 6,558.58.

The UK continued to witness more evidence that a sustainable economic recovery could be within reach as the Markit/CIPS construction purchasing managers index rose from 49.4 in April to 50.8 in May, its best reading since October last year.

The reading showed that higher levels of construction output were driven by a robust and accelerated expansion of residential activity in May.

Despite the welcome news, the latest reading still indicated only a marginal pace of expansion and the index remained below its long-run series average of 53.9.

Elsewhere the British Retail Consortium announced that retail sales fought back in May, surpassing their mean growth rate over 2012.

Today’s biggest riser on the FTSE 100, following a positive update from broker UBS, was engineering group GKN, which enjoyed a 5 per cent rise to 313.4p, Discount airline Easyjet and Land Securities also enjoyed gains on the day, rising 3 per cent to 1,263p and 2 per cent to 946p respectively.

Among the banks HSBC was the top mover, up 2 per cent to 731.9p, while Lloyds also firmed 2 per cent to 62.56p.

The steepest faller was building services group Wolsley. Despite delivering a 7.9 per cent rise in third quarter profits its exposure to Europe hit confidence. The group said the overall growth rate in May has been similar to the growth rate in the third quarter.

Wolsley added that the US and UK have continued to grow well but market conditions remain challenging in the rest of Europe. Its shares fell by 6 per cent to 3,145p on the day. Also down was the soon to be relegated to the FTSE 250, Evraz, losing 3 per cent to 134p.

The close today marks a 25 per cent rise for the blue-chip index over the past 12 months to date.