PROFITS cheer from Barratt Developments helped housebuilders bounce back from yesterday's budget blow, but retailers were under pressure amid fears over the impact of a national living wage.
Supermarkets and high street chains were in the red as experts warned they faced significantly higher costs from a new living wage, with Sainsbury's, Debenhams and Sports Direct International among those on the fallers board.
The wider FTSE 100 Index rose 36.4 points to 6527.1 after a rebound in highly volatile Asian markets, led by gains on China's main index, which jumped after government measures to stabilise the market.
The Shanghai Composite in mainland China surged 6.8 per cent, while Hong Kong's Hang Seng Index rose 4 per cent a day after suffering its biggest drop since the financial crisis.
A flurry of measures announced yesterday included a government order to state companies and executives to buy shares.
But the Dow Jones Industrial Average on Wall Street closed sharply lower overnight in a dramatic session where trading was halted for more than three hours due to a technical glitch.
Among UK stocks, Barratt Developments rose 2 per cent or 9.8p to 604.3p after revealing it expects a 45 per cent leap in annual profits to around £565 million.
This helped the sector recover after falling heavily yesterday on Chancellor George Osborne's plans to restrict tax relief for buy-to-let landlords.
Next and Sainsbury's were among retailers suffering on worries over rising staff costs from a new living wage, down 195p at 7285p and 4p at 250.5p respectively, although Next was also hit as it turned ex-dividend, meaning investors are no longer entitled to the latest pay-out.
Elsewhere, infrastructure group Balfour Beatty was 2.6p lower at 225.9p after warning over full-year results once again, which is set to see the group post another loss.
