Stocks in London closed on the backfoot on Monday, as housebuilding shares were hurt by less-than-stellar data from Rightmove and a guidance cut from Crest Nicholson.
The FTSE 100 index closed down 4.61 points, or 0.1% at 7,257.82 on Monday. The FTSE 250 ended down 197.61 points, or 1.1%, at 17,898.99. The AIM All-Share closed down 2.42 points, or 0.3%, at 729.82.
The Cboe UK 100 ended down 0.1% at 723.52, the Cboe UK 250 closed down 1.1% at 15,731.44, and the Cboe Small Companies ended down 0.2% at 12661.13.
Figures from Rightmove on Monday showed that UK house prices declined at the fastest pace for the month of August since 2018.
The property portal’s latest findings showed house prices fell 1.9% on-month to £364,895 in August. On an annual basis, prices fell 0.1% in August, the first year-on-year decline in house prices since 2019.
The number of sales agreed is now 15% lower than the more normal 2019 level, Rightmove said, in a sign of ‘affordability challenges’.
The disappointing data hit housebuilding stocks in London, which were among the worst-performing blue-chip stocks at the close on Monday.
Taylor Wimpey, Persimmon, Berkeley, and Barratt Developments closed down 4.2%, 3.4%, 3.1%, and 2.5%, respectively.
AJ Bell’s Russ Mould said the weak house price data was ‘hardly a surprise’ given elevated economic uncertainty and ‘through the roof’ mortgage costs.
‘However, Crest Nicholson’s profit warning has laid bare the scale of the impact of a housing slowdown on the housebuilding sector,’ he added.
In the FTSE 250, Crest Nicholson closed down 8.2%.
Crest Nicholson lowered profit guidance after warning that conditions in the housing market worsened over the course of the summer. It added that it does not expect conditions to improve before its financial year-end on October 31.
The company now expects to achieve annual adjusted pretax profit of £50.0 million, which would represent a 64% decline from the £137.8 million achieved in the prior year. It had previously expected a profit outcome of £73.7 million, the company said in June, which would have been in line with published consensus at the time.
Crest Nicholson said it is ‘responding proactively’ to the difficult trading conditions and expects to keep a lid on future land activity after adding ‘several high-quality sites’ to its portfolio in the first-half.
Indivior was the FTSE 250’s top stock, meanwhile, closing 4.3% higher.
The pharmaceutical company, which specialises in treating addiction and mental illness, said it is resolving claims brought in antitrust multi-district litigation regarding its drug Suboxone by paying claimants millions of dollars.
Suboxone is a medicine to treat dependence on opioid drugs such as heroin or morphine. The claims were brought by the attorney generals of 41 states and the District of Columbia. They claim the company violated US federal and state antitrust and consumer protection laws in attempting to delay the generic entry of alternatives to Suboxone.
Indivior has agreed to pay $30 million. This is in line with its current provision of $188 million for the multi-district litigation.
Elsewhere in London, AIM-listed Fulcrum Utility Services plunged 61%.
The utility infrastructure services provider said it intends to cancel the admission of its shares to AIM as part of structural changes meant to return it to profitability.
Shareholders will be invited to consider the proposal at a general meeting scheduled for September 26.
Also on Monday, Fulcrum said its pretax loss widened to £25.7 million in the year that ended March 31, compared with £14.2 million the previous year.
Revenue decreased 18% to £50.6 million from £61.8 million, and infrastructure revenue decreased 19% to £46.4 million from £57.6 million.
‘Our [financial 2023] results reflect the legacy issues and the difficult conditions that the group has operated in,’ said Interim Chief Executive Officer Lindsay Austin.
In European equities on Monday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.1%.
Stocks in New York were mixed at the London equities close. The Dow Jones Industrial Average was down 0.6% and the S&P 500 index was down 0.1%, while the Nasdaq Composite was 0.4% higher.
In the US, this week’s focus will be the Jackson Hole symposium, which will bring together economic policymakers worldwide.
‘This event may help clarify the likely path for the leading central banks’ monetary policy, providing more direction to the foreign exchange market,’ explained Ricardo Evangelista, senior analyst at ActivTrades.
Fed Chair Jerome Powell is expected to speak on Friday at the Jackson Hole meeting. The topic this year is ‘Structural Shifts in the Global Economy.’ AJ Bell’s Russ Mould described the event as the ‘main course’ of the week.
The meeting comes at a time that US interest rates are at their highest in over two decades and markets will be keeping a keen ear out for any hints on the future of monetary policy.
‘The chances are that [Fed Chair Jerome Powell] will keep his hawkish stance despite falling inflation...This being said, the fear of a decidedly hawkish Fed is already priced in, and if there is no more hawkish surprise from this week’s Jackson Hole meeting, tensions among investors could ease by next week,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The dollar was mixed as traders looked ahead to the three-day meeting in the US state of Wyoming.
The pound was quoted at $1.2732 at the London equities close on Monday, down slightly from $1.2736 at the close on Friday. The euro stood at $1.0887, up from $1.0876. Against the yen, the dollar was trading at JP¥146.31, higher compared to JP¥145.20 late Friday.
Brent oil was quoted at $84.98 a barrel at the London equities close on Monday, up from $84.21 at the same time on Friday. Gold was quoted at $1,888.81 an ounce, lower against $1,892.45 at the close on Friday.
In Tuesday’s UK corporate calendar, there are half-year results from engineering and consulting firm John Wood and car dealership chain Lookers. Diversified miner BHP Group will also release its full-year results.
The economic calendar has US existing homes sales data at 1500 BST.
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