Market report: Pace slides on US deal worries

Pace, a member of the FTSE 250, moved against the broader index, with the second-tier rising 80.58 points to 15,930.92. The FTSE 100 added 13.55 to a two-month high of 6,822.42, with better than expected US jobs data failing to make a significant impression on the benchmark index.

Surprisingly strong first-quarter results from Royal Bank of Scotland lifted the state-backed lender 25.1 to 331.7p, a 8.2pc rise that was its biggest one-day gain since January 2012. InterContinental Hotels Group, another that reported quarterly numbers, jumped 166p to £21.90 after announcing it would return $750m (£445m) to investors.

Elsewhere, there was demand for the housebuilders after two heavyweight brokers – JPMorgan Cazenove and Citigroup – recommended buying into recent sector weakness.

“While mortgage approvals disappointed in February and March, we see no real change in earnings risk,” said analysts at JPMorgan. They advised that clients buy Taylor Wimpey, up 3.3 at 108.6p, Bellway, 44p higher at £14.85, and Berkeley Group, 68p better at £24.12. Aynsley Lammin, analyst at Citi, said that valuations had “become less stretched” following the sell-off and upgraded Redrow, 13.6 higher at 305p, and Taylor Wimpey to “buy”.

Finally, Woodford Investment Management, the new venture by Invesco Perpetual’s former star fund manager Neil Woodford, began declaring stakes in companies. They included a 3.1pc holding in Homeserve, down 5.8 at 334.2p, a 5.7pc stake in Raven Russia, 3¼ higher at 67¾p, 5.9pc of Velocys, 0.875 cheaper at 161p, and 10.8pc of e-Therapeutics, unchanged at 28¾p.

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