FTSE 100 reverses losses, miners and financials lead turnaround

The FTSE 100 reversed early losses on Friday as gains in mining and financial stocks pulled it back from a tech-fuelled plunge in the prior session, while housebuilders tumbled amid scrutiny from the UK's competition regulator.

The FTSE 100 reversed early losses on Friday as gains in mining and financial stocks pulled it back from a tech-fuelled plunge in the prior session, while housebuilders tumbled amid scrutiny from the UK's competition regulator. The blue-chip FTSE 100 rose 0.6%, but was set for a third straight week of decline, while the mid-cap index FTSE 250 added 0.9%. Major miners BHP Group and Rio Tinto rose on higher metal prices and improved prospects in China.

"The slip during the opening trade in the FTSE was a knee jerk reaction to the tech sell-off we saw on Wall Street yesterday. (However) we see investors turning more pragmatic and are re-entering the European markets on the back of cheap valuations as against the United States," said Andrea Cicione, strategist at T.S. Lombard. Shares of housebuilders Barratt Developments, Persimmon Plc, Taylor Wimpey and Countryside Properties fell between 1.0% and 3.5% after the Competition and Markets Authority (CMA) said it was investigating whether they might have broken a consumer protection law in relation to leasehold homes. Those losses pulled the wider housebuilding index down 0.14% to a near one-month low.

The FTSE 100 has recovered nearly 17% from its multi-year lows in March with the support of historical stimulus measures, but has lost nearly 23% so far this year. All eyes are on the U.S. job growth data for August due later in the day.

Elsewhere, housebuilder Berkeley Group rose 0.9% after maintaining its annual profit forecast and plans to pay shareholder returns, as it benefited from a rebound in demand for houses after coronavirus-induced restrictions eased.