FTSE 100 close : Property stocks soar
The Footsie slipped this afternoon after a strong start to the day's trading.
London markets were hit by news that the Dow Jones had lost 140 points (1.5%) in early trading on the back of poor US consumer confidence data.
By late-afternoon the FTSE 100 had dropped 39 points to 4,715. It close down 41 points to 4,713.
Property shares received a boost on Friday after a report that a group of Indian and Gulf investors was mulling a £10bn-plus takeover for British Land.
Ian Griffiths, a dealer at CMC Markets, says there is no let-up in the economic data today.
'Wall Street ended the session way off of its highs as traders were cautious after the retail sales and initial jobless claims showed a weaker performance.
'After the BoE inflation report earlier in the week, today sees CPI data from both the Euro Zone and the US, numbers that could dent the traders thoughts of ending the week in positive territory. '
The Daily Telegraph today reported that a consortium comprising Indian steel tycoon Lakshmi Mittal and the Abu Dhabi royal family had approached Credit Suisse for advice on a possible acquisition of Britain's second-largest real estate company, as a two-year property slump nears an end.
British Land, one of the biggest office landlords in Britain with a portfolio of offices and retail property worth around £8.6bn, would not comment.
Its shares, which had risen a quarter in value in the past month, are up nearly 4% at 512.5p. Hammerson, which benefited from an upgrade by broker Societe Generale yesterday, saw an even bigger rise – 28.3p or 7% to 424.8p falling to 6.80p to 404.10p. While Land Securities is up 4.50p up at 631p
Property stocks have enjoyed a massive rally since March. The surge prompted analysts at Nomura to downgrade the sector to 'neutral' from 'bullish' last week, citing fears the underlying recovery in bricks and mortar assets would not keep pace with the high-flying listed sector.
Shares in Taylor Wimpey surged 6.7%, topping the FTSE 250 leaders' board as RBS upgrades its rating for the housebuilder to 'buy' from 'hold' with an increased target price of 47p, up from 37p.
RBS says in a note that Taylor Wimpey's recent first-half results continued the more robust tone of recent updates and the margin benefit provided by the firm's writedown makes further material net asset value erosion less likely.
RBS says after factoring in a proportion of the firm's significant off-balance sheet tax assets into its increased target price, Taylor Wimpey shares look good value.
Rivals were also stronger, with Bellway gained 24.5p to finish stronger at 835.5p and Bovis Homes is up 14.5p at 527.5p.
Miners rallied amid brighter economic prospects, led by Kazakhmys with a 33.5p gain to 934p later falling 3p to finish 897.5p. Fresnillo alos finished down 6.5p at 569p.
Elsewhere, Chrysalis rose 13.65% after an upbeat third quarter update that also revealed it was set to benefit from a boom in royalties on surging sales of Michael Jackson songs - many of which were penned by Chrysalis writer Rod Temperton.
Shares in the music group added 9.25p to 77p.
MONDAY'S AGENDA
• Michael Page posts third-quarter results. Profits fell 45% in the second quarter compared with the same period the previous year. Chief executive Steve Ingham admitted at the company's last update that he was expecting a challenging quarter. Analysts at Singer Capital Markets reckon there are now signs of stabilisation in the hiring market.
• Rightmove publishes its monthly housing market index. Last month, the property website reported that residential prices had risen by close to £1,500. Rightmove has said the market has hit the bottom and is now starting to recover.
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