Market report: Monday close
Builders enjoyed a brief respite today after being rocked by the housing slump and subsequent sell-off that has seen their shares slump to record lows. The gains also lessened the chances of a plethora of rights issues being launched.
Market watchers: Latest shares prices
Many builders are now angry that the Government has failed to offer help. They warn that fewer than 100,000 homes will be built this year compared with the Government's target of 240,000. Others have convinced themselves that the major banks will find a source of cheap capital to restore the health of their balance sheets and enable them to write off big chunks of their bloated land banks. Quite where the cashstrapped banks are going to obtain all this extra money remains uncertain.
A number of builders are already offering part-ownership to clear their stock of unsold homes after sales volumes slumped to a 30-year low. Taylor Wimpey, up 5¾p at 76¼p, is offering interest-free loans on up to 25% of properties for up to 10 years to shift unsold stock.
In any event, stock market bears appear to have called it a day, for the time being at least. They were cashing in today and squaring up their positions following a good run that has seen them notch up whopping profits by selling short.
As a result, Persimmon, which has now lost its place in the FTSE 100 index, rose 8¾p to 420¼p. However, the shares had started the year at 1276p.
There were also gains for Barratt Developments, up 10½p at 97p, which has been plagued by talk of a rights issue. Word is the company is now in talks to renegotiate its banking covenants. At the last count, Barratt had debt of £1.7bn compared with its stock market value of little more than £300m. Bellway rose 24p to 536p, Bovis put on 7¾p to 385p and Redrow was up 8½p to 172¼p.
City speculators are looking for another round of consolidation among the miners, despite claims from a leading player that the sector may have reached the top of the cycle. Reports claimed Brazilian miner Vale was poised to make an offer of at least 4000p a share for Anglo American, valuing the business at £58bn. Anglo shares responded with a surge of 148p to 3337p.
But HSBC casts doubt on whether this might be money well spent. It says that, following a 'perfect storm' to start off the year, the commodities rally is facing its biggest challenge. Global demand is easing as inflation accelerates while the US dollar has started to rally.
HSBC warns this could derail fund flows from the 'short dollar/long commodities' trade that has underpinned the commodities rally for some time. The broker also says demand has started to ease as supply responds to elevated prices.
Investors chose to ignore all that, with mining shares marked higher. Eurasian Natural Resources jumped 83p to 1404p, Kazakhmys 61p to 1611p and Vedanta Resources 24p at 2277p.
Shares generally went into reverse following another rise in the oil price to record levels. The FTSE 100 index closed with a fall of 8.2 points to 5794.6, while on Wall Street this afternoon the Dow Jones Average lost 41.9 points at 12,265.4.
Banks were marked higher initially on the back of Barclays' fund-raising plans. Barclays added 11p at 329p and Alliance & Leicester fell 1p at 337¾p.
Aero Inventory advanced 132¾p to 626p after receiving a bid approach.
Arian Silver firmed ½p to 13p on the back of 'outstanding' assay results from a diamond-drill programme at its Tepal project in Mexico. It said 30 out of 42 the drill holes had significant gold-copper mineralisation.
Stock market information
null
TOMORROW'S AGENDA
• The Bank of England's monetary policy committee (MPC) left interest rates on hold this month as fears of soaring fuel and food prices trumped concerns over slowing growth. May's inflation figures, published tomorrow by the Office for National Statistics, are likely to fuel speculation that the MPC will soon be forced to put up rates to ease inflationary pressures. In April, the Consumer Prices Index shot up to 3%, just short of the 3.1% which would require Governor Mervyn King to write an explanatory note to the Chancellor and considerably above the Bank's 2% target.
• Leisure group Whitbread updates the City on trading. Despite its shares plunging since last year, Citigroup analysts believe the company is well-placed to handle a consumer downturn. With around 70% of profits now coming from its budget hotel arm, Premier Inn, they say Whitbread should prove resilient as travellers opt for cheaper accommodation.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Will the high-flying US stock market stumble if rate cuts don't arrive?
- How to invest for income and growth: SAINTS' James Dow
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Blue Whale fund manager on the best of the Magnificent 7
- Mini Cooper SE: The British icon gets an all-electric makeover
- Mini celebrates the release of brand new all-electric car Mini Aceman
- MIDAS SHARE TIPS UPDATE: Wind is turning in Octopus...
- British businesses awash with 'accidental' bosses who...
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Shipping broker Clarksons on list of shame after...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- TONY HETHERINGTON: Boss behind firms fined £340k for over...
- A good week - not before time, but let's not get carried...
- Hollywood silly money? I'd only have stuffed it under the...
- As world lurches from crisis to crisis, experts share...
- 86-year-old Peter's woes with a faulty smart meter that...
- Virgin Money's biggest independent investor...
- Britain's nascent battery industry receives shot in the...
- Helium and hydrogen company set to join stock market in...
- Where is Labour's 'white heat' revolution to revive...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- MIDAS SHARE TIPS: Why it soon won't be hip to give the...
- Ikea pushes back opening of its Oxford Street store to...