London’s FTSE 100 was up 0.5% at 6,878.75 in afternoon trade on Tuesday.
Housebuilders Berkeley and Persimmon were among the top performers.
IG market analyst Chris Beauchamp said: “Updates from the sector have been rosy over the past few months, providing a positive backdrop to the shares, and with the sector down some 13% from its peak in April it looks like the time is ripe to go shopping.”
Stocks that were hit hard in Monday’s selloff also gained, with GKN owner Melrose, engine maker Rolls-Royce and advertising agency WPP all up. Rolls-Royce was given an added boost after Citi said the shares offer “significant long-term value”.
The bank, which rates the stock at ‘buy’, said: “We do not know when the wide body market will recover, but we do believe it will.
“When it does, we expect Rolls-Royce to recover faster (as it has more new deliveries adding to the fleet and fewer old aircraft being retired).”
On the downside, Just Eat was weaker, having gained a day earlier, probably on expectations that people might eat out less if Covid cases continue to rise.
Online supermarket Ocado was in the red again following a fire at its London warehouse on Friday which has disrupted this week’s deliveries.
