UK stocks managed to pare most of its losses on the day, having spent most of it in the red, on the back of increased support for housebuilders.
UK house prices enjoyed their best August in eight years, falling only 0.8% in a typically weak month. Commentators say a shortage of homes in the UK could be propping up prices.
The number of homes for sale has fallen short of demand since the general election, creating one of the widest gaps between buyers and sellers since at least the start of the financial crisis.
Joshua Mahony, market analyst at IG said: “This will no doubt act as a further incentive for investors in homebuilders like Persimmon and Barratt Developments who are expected to enjoy yet another buoyant year.”
Persimmon (LON:PSN), which has interims out tomorrow, was 16p higher at 2,121p while Barratt (LON:BDEV) was flat at 653p.
The FTSE 100, which had been 20 points lower at lunch, ended half a point lower at 6,550.
Not all were higher, however. Bovis Homes (LON:BVS) posted a record number of home deals and a 10% rise in average sale prices on private completions to £264,200 against a year ago.
First half profits rose 9% to £53.8mln but despite the good results, shares dropped 3.855 to 1,154p.
Elsewhere, Shipping broker Clarkson (LON:CKN) sank 195p to 2,555p as it reported a fall in pre-tax profit in the first half on higher expenses and the acquisition of rival shipping broker RS Patou ASA, adding that results would be weighted to the second half.
In small caps, African Potash (LON:AFPO) up 32.8% to 1.5p was one of the biggest gainers at lunch although it has had no news out since last Wednesday.
Shares have been on the march since it signed a deal with Comesa – a free trade union of twenty African countries - to provide 500,000 tonnes of fertiliser over three years.
Conversely, Red Emperor Resources (LON:RMP) was the biggest faller as it failed to find commercial oil at its Hawkeye Well.
Having spent US$25mln (£15.9mln) on the project, the company has £5.66mln left to identify new opportunities. Shares plummeted 61% to 1.27p.
Elsewhere, Cellcast (Lon:CLTV) the operator of interactive TV broadcaster Babestation, denied speculation that it was in talks with Google.
Having traded as high as 1.92p in early deals, Cellcast shares have been volatile all day and were trading at 1.55p at lunch, up 40% for the day.
Hostel operator Safestay (LON:SSTY) has agreed to buy a 615 bed/132 room hostel in Edinburgh for £14.9mln.
The hostel chain owner will issue 15mln shares at 62p per share to raise up to £9.34mln to contribute to the deal and has secured an £8.5mln debt facility to fund it, with the balance to be used for working capital.Shares were 12% lower to 60.7p.