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Housebuilders continue comeback

Housebuilders continued to gain ground today on relief that Bank of England measures to control the housing market are less severe than had been feared.

Barratt Developments rose 4% and Persimmon was up by 2% as the pair dominated the top of the blue-chip risers board for a second day in a row.

An otherwise quiet session saw the FTSE 100 Index climb 10.9 points to 6746.1, despite a lack of impetus from Wall Street as it emerged that US consumer spending edged higher at half the rate that economists had predicted.

The modest improvement in London provided some relief for investors after a sharp fall on Wednesday and uncertain session yesterday when banking stock Barclays took a mauling over allegations in New York that it misled large institutional investors who used its dark pool dealing service.

The stock remained at a two-year low of 215p after falling 7% on Thursday and failing to hold on to initial gains seen at the start of trading today.

On the currency market, the pound was unchanged against the US dollar and euro - at 1.70 and 1.25 respectively - after GDP for the first quarter of 2014 was left unrevised at 0.8%, dashing City hopes for an upgrade.

The Bank of England's efforts yesterday to tackle fears of a property bubble continue to be met with relief in the construction and estate agency sectors.

As the rules on loan ratios and stress tests are seen as insurance against a future explosion in price growth, Persimmon lifted another 25.5p to 1284.5p and Barratt Developments gained 14.75p to 377.65p.

Redrow set the pace in the FTSE 250 Index, up 15.45p to 283p, while Bellway added 41.5p to 1592.5p and estate agency Foxtons rose 11.4p to 294.4p.

Back in the top flight, shares in Rolls-Royce were 16p higher at 1062p after Reuters reported that Airbus is set to upgrade its A330 planes with the engine maker as exclusive supplier.

In the FTSE 250 Index, National Express jumped 3% or 8.2p to 256.2p after its c2c service secured the 15-year Essex Thameside rail franchise.

C2c's victory means FirstGroup, one of the other bidders, has missed out again, having been overlooked for the recently-awarded "mega" franchise of Thames, Southern and Great Northern. Its shares were 0.3p lower at 130.2p.

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