FTSE 100 movers: Housebuilders head higher as EasyJet dives
By Michele Maatouk
Date: Friday 18 Jan 2019
(Sharecast News) - London's FTSE 100 was up 1.9% to 6,963.20 in afternoon trade on Friday, underpinned by signs of improving relations between the US and China.
Housebuilders were on the rise, with Persimmon, Barratt Development and Taylor Wimpey at the top of the leader board following losses a day earlier as the latest RICS survey revealed a bleak outlook for the UK housing market.
On Thursday, the RICS survey showed that the outlook for the housing market over the next three months was at its worst level on record in December.
On the downside, precious metals miner Fresnillo lost its shine as gold prices fell.
Oanda analyst Craig Erlam said: "A rebound in the dollar over the last week or so has taken some of the shine off gold just as it was toying with the idea of breaking above $1,300. But that doesn't seem to be responsible for the drop we're seeing today, with the greenback looking relatively flat as gold slips around half a percent.
"Instead, an improvement in risk appetite is probably the main driver here. This hasn't really weighed on gold over the last few weeks as stocks have rebounded strongly off their lows but indices are now facing some interesting tests as they try to break through levels that prior to the sell-off were strong support zones."
Elsewhere, EasyJet was under pressure, knocked lower by a downgrade from JPMorgan Cazenove and a profit warning from rival Ryanair.
In a note on European low-cost airlines, JPM cut its stance on EasyJet to 'neutral' from 'overweight' and chopped the price target to 1,450p, from 1,800p, as it reiterated its 'overweight' ratings on Ryanair and Wizz Air.
JPM said that based on its historic and expected financial results, it sees EasyJet as a "good" airline, whereas Ryanair and Wizz are "very good".
"EZJ currently trades on a 12-mth forward price-to-earnings of circa 10x, a c30% discount to its long-term average of circa 14x.
"If the UK achieves a 'soft Brexit; (which isn't guaranteed) then we see meaningful medium-term upside for the shares," it said. However, EasyJet's historic valuation discount to Ryanair has largely disappeared, and mean reversion is now likely, it added.
FTSE 100 - Risers
Persimmon (PSN) 2,410.00p 4.10%
Barratt Developments (BDEV) 537.40p 4.03%
Taylor Wimpey (TW.) 168.40p 3.95%
GVC Holdings (GVC) 714.00p 3.93%
Hargreaves Lansdown (HL.) 1,839.00p 3.78%
Informa (INF) 677.80p 3.70%
Prudential (PRU) 1,499.00p 3.45%
Royal Bank of Scotland Group (RBS) 244.70p 3.25%
Schroders (SDR) 2,640.00p 3.21%
Standard Life Aberdeen (SLA) 270.75p 3.18%
FTSE 100 - Fallers
Fresnillo (FRES) 887.40p -1.49%
Ocado Group (OCDO) 887.00p -1.47%
Mondi (MNDI) 1,801.50p -0.25%
easyJet (EZJ) 1,169.50p 0.04%
NMC Health (NMC) 2,735.40p 0.05%
Bunzl (BNZL) 2,414.00p 0.08%
London Stock Exchange Group (LSE) 4,413.00p 0.20%
British American Tobacco (BATS) 2,520.00p 0.30%
Micro Focus International (MCRO) 1,498.00p 0.30%
Vodafone Group (VOD) 148.85p 0.36%
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