The industry, and housebuilders in particular, performed strongly last week as takeover talks fuelled share price rises even before this Monday鈥檚 announcement of the proposed merger of Taylor Woodrow and George Wimpey.

Bovis Homes, which has been the subject of takeover rumours since publishing its interim results this month, rose 5% to 1142p. Redrow increased 5.5% to 606.50p, while Persimmon rose 2.6% to 1400p.

Shares in George Wimpey, which had been linked with Taylor Woodrow before the announcement, rose 12.4% during the week to 635p, with Taylor Woodrow up 5.3% to 420.50p.

The construction and materials share index rose 3.63%, outperforming the FTSE all-share index, which went up 3.42%.

In the construction sector, Kier rose 8.8% to 2457p after strong interim results. M&E contractor T Clarke also performed well, up 10.1% to 224p. There were no significant falls.