Market report: Monday close
Talk that housebuilding shares had been oversold was resoundingly dismissed today, after Rightmove added to the misery engulfing the property sector.
Latest: Updated share prices
The website reported that prices had posted the biggest annual drop in at least six years this month, sending building stocks plunging yet again.
Bellwether of the sector Persimmon was the hardest hit, diving 19¾p to 332½p, and making it the biggest faller on the second tier. Rival Bovis sank 25½p to 426½p and Bellway fell 17½p to 557½p
The housing market may be in dire straits, but the threat of increased competition did for Rightmove's shares. The residential property sales website was hit by an announcement from the estate agents' trade body that it was planning to create a free rival.
The National association of Estate agents will launch Property live in October, a website allowing estate agents to list their flats and houses without paying a subscription fee, in a move which should help the beleaguered industry but spells trouble for Rightmove, which charges a monthly rate to advertise on its site.
Its shares, which were changing hands at more than 600p less than a year ago, plummeted by over 8% on opening, before recovering slightly to trade down 14¼p at 309p.
Trading volumes again proved thin, allowing the blue-chip index to stage a rapid 70-points turnaround before losing most of the gains after Wall Street opened lower. Even the top-traded stock Vodafone, up 2p to 140¼p, which on a normal day sees 100m shares change hands had fewer than 45m traded by late afternoon. London's benchmark index rose fell 4.60 to 5450.2 while the Dow sank 31.1 to 11,628.8. Retailers had a miserable day, reversing Friday's gains, but a rumour that a bid could finally be coming for Debenhams provided a rare reason for cheer. Spanish fund manager Bestinver Gestion topped up its stake to 12%, starting talk that the struggling High Street chain could finally be taken over.
Its shares were still off 3p at 51p, while Home Retail Group was 8¾p cheaper at 247p and Marks & Spencer was down 3¾p at 272¼p.
But there was better news for commodity stocks. Record profits from Anglo-Aussie giant BHP Billiton, continued talk of further consolidation and a rally in the price of gold buoyed the miners, with BHP rising 8p to 1537p, Anglo American soaring 56p to 2791p and Vedanta Resources putting on 16p to 1738p.
Oil stocks were another of the day's big beneficiaries, as the price of crude climbed amid fears over the impact of a storm on facilities in the Gulf of Mexico. Explorer Tullow Oil raced to the top of the Footsie leaderboard, surging 25p to 702p, Royal Dutch Shell's A shares were 25p dearer at 1822p and energy services company Wood Group rose 6¼p to 401¼p. But the oil price rise weighed on gas-guzzling companies, with British Airways sliding 8¼p to 252¾p and cruise operator Carnival down 47p to 1938p.
The long-suffering banking sector received a rare spot of good news as Royal Bank of Scotland found a friend. Citigroup raised its target from 250p to 270p and reiterated its buy rating, saying the bank has made good progress in boosting its capital ratios and integrating its new businesses. But despite Citi's upbeat stance, speculation that RBS is on the brink of abandoning the sale of its Direct line and Churchill insurance empire sent its shares plunging 4¼p to 228½p.
Newspaper publisher Johnston Press remained out of favour with brokers as Morgan Stanley cut its price target for the shares from 75p to 70p and warned that the advertising market will deteriorate further. The City big-hitter said first-half figures due out at the end of the month are unlikely to give shareholders any cause for cheer. But traders ignored the pessimism and the shares rallied 2p to 60p.
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Tomorrow's agenda
As the supermarket price war intensifies, figures on market share will be closely watched. TNS's survey, which reveals the grocery-buying habits of UK households over a three-month period, is expected to show that the more upmarket chains are losing share, as a growing number of shoppers decamp to discount retailers Aldi, Lidl and Netto.
Ernest Jones and H Samuel owner Signet holds an extraordinary meeting of shareholders to gain their backing to transfer its primary listing to the New York Stock Exchange. The struggling jewellery retailer will seek a secondary listing on the LSE. Over 70% of its sales are on the other side of the pond.
Business supplies group office2office is expected to report results for the first six months of the year are in line with expectations as higher input costs are offset by price increases and cost-cutting measures.
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