The construction and building materials sector had a skip in its step last week as companies across the board gained ground.
The sector overall rose 3.4 points to 3357, in what was the third consecutive weekly increase.
Fears about rising inflation in North America were dampened, and UK shares benefited with a 1.8% rise in the All-Share Index. Shares dropped in only 11 of the 53 companies listed in the construction sector.
It was the building materials power-houses that had the greatest impact and boosted the sector’s performance last week, facilitating a convincing run overall. Despite the fact the two FTSE 100 companies in the sector, Wolseley and Hanson, are perhaps not the most glamorous, they stole the show.
Wolseley, with a market capitalisation of £6.7bn, dwarfs most companies in its sector, which means that rises in its share price have a greater impact on the performance of the sector overall. It makes last week’s 6.3% increase to 1121p all the more impressive.
Similarly, shares in Hanson, which has a market capitalisation of £3.6bn, rose 3.4% to 497p.
Both firms have earned the trust of the City, not only because of strong financial performances but also they have outlined, and begun, an aggressive acquisition programme. They may be driven by different by ends – Wolseley in a bid to increase its market share in the USA, and Hanson in an attempt to protect itself from the greedy hands of foreign rivals – but the end result is the same.
The third biggest company in the sector and potential FTSE 100 entrant is Persimmon. It led the way among the housebuilders last week, up by almost 5% to 716p. It was a mixed picture among the rest of the housebuilders, with Wilson Bowden not far behind Persimmon, up 4.5% to 1099p, while shares in Berkeley dropped 2.7% to 770p.
The worst performer in the sector overall was conservatory maker Ultraframe. Shares dropped by almost 17% to 43.75p after it reported interim losses of £6.2m, after exceptionals, compared with a £4.7m profit in the same period last year. However, the company was an exception to the rule last week and with a market capitalisation of just £45m the impact is limited .
Angela Monaghan is business editor