Market snapshot: boost for Bellway and FTSE 100 index

Up more than quarter since its April low, this housebuilder is extending its winning streak. ii's head of markets runs through its latest trading update and developments both here and overseas.

10th June 2025 08:36

by Richard Hunter from interactive investor

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Bellway (LSE:BWY) is showing signs of building on its recent momentum despite any number of emerging challenges.

An increase to stamp duty in April follows uncertainty which has been hanging over the sector, with affordability a particular headwind. The speed and number of interest rate cuts is also in question which could affect consumer confidence and propensity to buy, while the proposed relaxation of planning regulations is yet to take full effect.

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More positively, Bellway has seen an increase of 8.1% in weekly private reservations per week including bulk sales, while the forward order book comprises a 7.7% improvement in the number of homes to 5,759 with a 14% increase in value to £1.65 billion. The group has further contracted to buy 6,759 plots since August, and the levers which the group can pull are evident in terms of a strong land bank which exceeds 95,000 plots, with proposed government reforms to the planning system a likely catalyst for some of this volume to be unleashed.

The immediate outlook is also upbeat, with the group being fully sold for the year. It expects to increase volume output to between 8,600 and 8,700 homes this year, an upgrade to previous guidance and ahead of the 7,654 reported last year. Alongside this improvement is an expected rise from 10% to 11% in underlying operating margin, leaving the company on track to meet its target of 20% cumulative volume growth in the two years to July 2026.

For Bellway, the share price tells the story. Recently improving conditions as evidenced in this latest update have led to a spike of 17% in the last three months, but this rally was not sufficient to prevent a decline of 3% over the last year, as compared to a gain of 4.1% for the wider FTSE250.

The shares remain 33% lower than their pre-pandemic peak in January 2020, which underlines the scale of the revival needed for the group to regain its former glories. Even so, investors are tending to recognise the recovery potential, with the market consensus of the shares as a buy signalling support.

Market snapshot

Investors remain on tenterhooks as talks between the US and China spill over to today, with a nuanced situation yet to be resolved.

For the time being, the pause in tariff hostilities is a positive starting point as the US seeks the restoration of rare earth mineral exports from China which would inevitably result in a mutual relaxation. In turn, semiconductor stocks in both countries staged a hopeful rally, although at an index level gains were muted. The more recent strength has also dragged each of the main indices into positive territory for the year, with gains of 0.5%, 2.1% and 1.4% for the Dow Jones, S&P500 and Nasdaq respectively.

UK markets were also more bullish in opening trade, despite a slightly concerning development on the economy. The number of available jobs fell by 63,000 between March and May and unemployment ticked higher, suggesting a weakening in the labour market caused in no small part by the rises in minimum wages and National Insurance contributions which took effect in April.

The more domestically focused FTSE250 showed little reaction to what could prove to be an ominous portent, and climbed slightly higher to leave the index ahead by 3.3% so far this year. Emerging Merger & Acquisition activity targeting any number of companies on comparatively modest valuations has been positive for investors, if not for the future of the London markets as a whole.

Another sprightly start led the premier index to stand up by 8.5% in the year to date, helped along today by a read across from the positive Bellway update in the housebuilding sector and with some general interest in top quality blue chips. There was a slight headwind from the mining and banking sectors, but this was not enough to prevent the index brushing the record level it achieved in March as investors continue to be attracted by its generally defensive qualities.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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