Market Report: A safe bet looks shaky

 

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The Independent Online

One of last year’s safest bets is starting to look shaky.

Jefferies has called the top for the housing market, warning that much of the air could be let out of the property sector this year.

The broker thinks shares in the sector are set for a hefty correction as mortgage approvals tail off, house prices cool and UK GDP growth slows. Add to that the uncertainty around the general election in May – an issue raised by Credit Suisse earlier in the week – and property begins to look far from “as safe as houses”.

Builders suffered yesterday, with Persimmon losing 80p to 1,459p, Barratt Developments off 23.3p at 431.4p and Taylor Wimpey down 7.1p at 125.7p. Estate agents and property websites were also hit, with Zoopla 10.2p lower at 171.3p, Foxtons down 4.25p to 159.75p and Rightmove losing 98p to 2,157p.

The sector’s weakness contributed to a dour mood on the FTSE, which ended the week 68.82 points lower at 6,501.14.

As the ebullience over Tesco’s turnaround strategy abated, supermarkets fell. Tesco lost 5.15p to 204.1p, while J Sainsbury retreated 10.6p to 241.8p. WM Morrison tumbled 8.4p to 176.3p ahead of its Christmas trading figures next week. Bernstein forecasts that its sales may have fallen by as much as 4 per cent.

Despite announcing that it is on track to meet full-year forecasts, the electronic parts distributor Laird tumbled 30.1p to 301.6p. Liberum noted that it had rallied strongly ahead of the announcement.

Newspaper publisher Mecom jumped 9p to 150.5p after it said Dutch regulators had raised only a “limited number” of concerns over its proposed merger with De Persgroep. It said the two parties “remain confident” that the deal would gain approval but said the deadline for the merger could be pushed back to late February.

Insurance outsourcer Quindell was forced to respond to speculation that the former Old Mutual boss Jim Sutcliffe was about to be named the company’s new chairman. While not denying the speculation, Quindell said “there can be no certainty that any appointment will be made imminently”. Its shares climbed 3.75p to 84.75p.

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