Games Workshop, housebuilders, gold and UK banks

In a market stuck in a volatile but sideways range, these are the stocks making a difference today.

A rocket under housebuilding shares and another remarkable performance by fast-growing Games Workshop provided investors with an escape from market uncertainty today.

Shares in Barratt Developments (LSE:BDEV), Persimmon (LSE:PSN), Taylor Wimpey (LSE:TW.) and Berkeley (LSE:BKG) all surged by 3% or more in the FTSE 100 index, after the Financial Times reported that the UK government was planning an extension to the Help to Buy scheme.

The move, which may be announced later this week, would come as a major relief for an industry where support under Help to Buy has accounted for half of all sales at some big housebuilders. The current version of the scheme is due to end on 31 March, but home purchases must be completed by the end of this year in order to be eligible.

The potential boost for builders helped to offset another poor session for the FTSE 100, which was 17.5 points lower at 6087.5 after a fall back by the mining sector. Polymetal International (LSE:POLY) was down by 3% to 1,878.5p, having recently benefited from the surge in the gold price to a record high. Heavyweights Rio Tinto (LSE:RIO) and BHP (LSE:BHP) were both down by 1.5%.

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The pressure on banking stocks also continued after the European Central Bank (ECB) extended its recommendation not to pay dividends or buy back shares until 1 January. It added that it expects lenders to exercise extreme moderation on variable remuneration.

While UK banks have already committed to not paying dividends this year, the cautious message from the ECB has done little for investor confidence ahead of this week's reporting season, which begins when Barclays presents results tomorrow. HSBC (LSE:HSBA), Standard Chartered (LSE:STAN) and Lloyds Banking Group (LSE:LLOY) shares were all down by 1% or more today.

The FTSE 250 index was a place of considerably more cheer for investors, with the UK-focused benchmark up 0.6% to 17,260 after strong gains for housebuilders Redrow (LSE:RDW), Vistry (LSE:VTY) and Bellway (LSE:BWY).

Sabre Insurance (LSE:SBRE) delivered the biggest rise after the private motor insurance underwriter said trading conditions had improved markedly since its last trading update in May. Premiums written in June were 12% higher than a year earlier, with quotation requests increasing sharply as lockdown restrictions have eased.

Shares in the company, which used to be part of Aviva (LSE:AV.) and joined the stock market in December 2017, jumped 7% to 280p.

That was only marginally ahead of Games Workshop (LSE:GAW), whose market valuation is now on the brink of £3 billion after rising another 7% to 9,085p in the wake of today's annual results. The stock has jumped 150% since the March market sell-off, and by 200% in the past two years.

The stock market success of a company selling dungeons and dragons-style fantasy games is made all the more remarkable by the fact that it is easily worth more than the smallest stock in the FTSE 100 index, which is currently ITV (LSE:ITV) with a market capitalisation of £2.4 billion. Games is also bigger than low-cost airline easyJet (LSE:EZJ) and security group G4S (LSE:GFS) in the FTSE 250.

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Games Workshop CEO Kevin Rountree left investors in no doubt about the company's record set of full-year results, which he described as “amazing” after profits jumped by £8.1 million to £89.4 million despite the disruption of Covid-19 towards the end of the period.

Demand for its Warhammer figurines now comes from across the world, with the Nottingham-based business generating around 75% of its £269 million annual revenues outside the UK. 

Rountree believes there are great opportunities for the business to grow, particularly in North America and Asia. He added:

“We seek out our customers all over the world. We believe that our customers carry our Warhammer hobby gene and to help find them we have two key tools: our retail chain and our online content.”

The biggest stock in the FTSE 250 index by market value is currently B&M European Value Retail (LSE:BME), with the discount chain up another 2% today after reporting a strong start to its new financial year. B&M now expects underlying earnings for the six months to the end of September to be between £250 million and £270 million, against City forecasts of £208.1 million. Shares rose 7.8p to 450.5p, giving B&M a market cap of close to £4.5 billion.

Moving in the opposite direction was baker Greggs (LSE:GRG) after a 49% slide in like-for-like sales due to the closure of stores for most of the second quarter, which caused a first half loss of £65.2 million. Recent sales trends since the reopening of outlets were described by Greggs as encouraging, reaching 72% of the level seen last year.

Shares still fell another 3% to 1,416p, which is close to the low of 1,300p seen in mid-March. They had been trading at 2,440p in February after a strong run over the previous two years.