- Housing stocks fall sharply
- Carney signals impending rate hike
- Osborne acts to cool housing market
- Oil stocks track crude higher on Iraq tensions
techMARK 2,806.77 -1.40%
FTSE 100 6,771.65 -1.04%
FTSE 250 15,802.08 -2.01%
The increased possibility of a rate hike before the end of the year prompted investors to offload stocks in the housing sector on Friday, with the FTSE 100 set to close at its lowest level in one and a half months.
London's benchmark index had dropped around 1% by midday, trading around the 6,772 level; it has not close below this mark since April 29th when it ended at 6,769.91.
Housing stocks were reeling on concerns over a slowdown of the UK housing market after comments from policymakers during the Mansion House speeches on Thursday evening.
Bank of England (BoE) Governor Mark Carney warned that the first hike in interest rates may come sooner than markets expect. Carney indicated that the central bank could tighten policy in as soon as six months, compared with analysts' previous expectation of an rate increase in the second quarter of 2015.
David Tinsley, UK Economist at BNP Paribas, said the Governor's comments "marked an important milestone" and that a rate hike in the fourth quarter of 2014 "is increasingly looking very likely".
Meanwhile, Chancellor George Osborne moved to quell fears of rampant house-price inflation by giving the BoE powers to cap risky mortgage lending. He also announced a £5m fund to promote the development of brownfield sites in an effort to boost supply.
A spike in oil prices
due to the recent flare-up of tensions in Iraq also held back risk appetite today. Brent crude was continuing to rise after jumping to a three-month high yesterday while West Texas futures extended a nine-month high after Islamist militants seized control of major towns and cities and threatened to move on Baghdad.
Housing, real estate stocks slip
Housebuilders Persimmon, Barratt Developments, Taylor Wimpey, Bovis Homes and Berkeley were all trading with heavy losses as investors reacted to the prospect of higher interest rates and a potential cooling of the UK housing market.
Property firms such as Land Securities and British Land were also out of favour.
Oil and gas stocks were among the handful of names making gains this morning as share prices
tracked crude prices higher, with Tullow, Shell, BG Group and BP on the rise.
Tullow was the standout riser after increasing the size of its loan facility for exploration in Norway, which now provides pre-funding for around 75% of investment in the region.
FTSE 250-listed miner Petra Diamonds surged after discovering an "exceptional" 122.52-carat blue diamond at its Cullinan mine in South Africa. "The rarity of a blue diamond of this magnitude sets it apart as a truly significant find," the company said in a statement.
FTSE 100 - Risers
Fresnillo (FRES) 812.50p +1.82%
Tullow Oil (TLW) 856.50p +1.72%
SSE (SSE) 1,571.00p +0.77%
United Utilities Group (UU.) 892.00p +0.62%
Tesco (TSCO) 293.35p +0.43%
Royal Dutch Shell 'A' (RDSA) 2,382.50p +0.42%
BG Group (BG.) 1,269.00p +0.32%
Petrofac Ltd. (PFC) 1,252.00p +0.32%
Royal Dutch Shell 'B' (RDSB) 2,490.50p +0.28%
BP (BP.) 509.60p +0.26%
FTSE 100 - Fallers
Persimmon (PSN) 1,221.00p -6.22%
Barratt Developments (BDEV) 348.90p -5.60%
Ashtead Group (AHT) 878.00p -4.36%
Sports Direct International (SPD) 783.00p -4.28%
easyJet (EZJ) 1,439.00p -4.13%
International Consolidated Airlines Group SA (CDI) (IAG) 375.80p -3.94%
British Land Co (BLND) 691.00p -3.63%
TUI Travel (TT.) 388.40p -3.62%
Next (NXT) 6,195.00p -3.58%
Mondi (MNDI) 1,036.00p -3.45%
FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 177.70p +6.34%
Ophir Energy (OPHR) 241.20p +2.25%
Wood Group (John) (WG.) 799.50p +1.20%
Afren (AFR) 143.30p +1.13%
Premier Oil (PMO) 344.00p +0.85%
Cairn Energy (CNE) 203.10p +0.79%
KCOM Group (KCOM) 94.50p +0.48%
Bank of Georgia Holdings (BGEO) 2,399.00p +0.42%
IG Group Holdings (IGG) 576.00p +0.17%
Caracal Energy Inc.(DI) (CRCL) 548.00p +0.09%
FTSE 250 - Fallers
Taylor Wimpey (TW.) 103.00p -7.21%
Bwin.party Digital Entertainment (BPTY) 106.50p -6.58%
Supergroup (SGP) 999.50p -5.97%
Thomas Cook Group (TCG) 141.60p -5.41%
Berkeley Group Holdings (The) (BKG) 2,259.00p -5.24%
Bovis Homes Group (BVS) 752.00p -4.81%
Bellway (BWY) 1,457.00p -4.52%
Ocado Group (OCDO) 347.80p -4.45%
Howden Joinery Group (HWDN) 315.30p -4.40%
Pace (PIC) 348.10p -4.37%