FTSE 250 watch: Fall in home-builders caps gains in mid-cap index

on Nov 28, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Thursday, November 28: A sharp fall in the price of the shares of British home-builders has today constrained the rise in the UK’s mid-cap equity index, the FTSE 250 (INDEXFTSE:MCX). The index, which has the majority of the UK’s listed residential property constructors among its constituents, was still up 0.3 percent at 15,452.75 as of 15:23 UTC, after having risen above 15,475 earlier in the day.

British house-builders have been the biggest losers today after the Bank of England announced that it will scale back its Funding for Lending scheme on evidence beginning to point to a housing market bubble. Builders have cited the BoE’s funding programme as a major reason for this year’s strong growth in the UK housing market.
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Just after 14:30 UTC, Barratt Developments (LON:BDEV) was down 4.93 percent to 329.51p, Taylor Wimpey (LON:TW) had fallen 6.64 percent to 106.90, Bovis Homes (LON:BVS) was off 6.26 percent to 771p and Bellway (LON:BWY) down 4.39 percent to 1,464p.
In a cautiously-worded statement, the BoE said that with housing market activity picking up and house price inflation appearing to be gaining momentum, “there is no longer a need for the FLS to provide further broad support to household lending”.

From January, the scheme will operate only in relation to small business, on the footing that credit conditions in that sector have improved to a lesser extent than the significant improvement now evident as regards home-buying credit.
Marston’s (LON:MARS) fell after the UK brewer and retail victualler said it will sell 202 pubs to real estate investment trust NewRiver Retail as part of efforts to cut debt and help pay for its new-style pub restaurants (Marston's share price: 202 pubs sold to NewRiver Retail for £90 million). Shares in Marston’s were at 143.8p as of 14:55 UTC, down 7.35 percent.

Shares in Pennon Group (LON:PNN) had advanced 1.65 percent to 648.50p as of 14:06 UTC, after the company reported a rise in fiscal first-half profits slightly above forecasts, with expansion at its South West Water arm countering weakness in its waste-management unit, Viridor (Pennon share price rises on H1 profit growth).
John Laing Infrastructure Fund (LON:JLIF) was up 0.26 percent to 114.70p as of 13:57 UTC after the infrastructure investment company announced it had completed the acquisition of a 50 percent stake in the Kelowna & Vernon Hospitals public-private partnership (PPP) project in British Columbia, Canada.

The deal marks John Laing’s third investment in the Canadian secondary PPP market and takes its total portfolio to 51 projects, the company said, without disclosing the price of the transaction. The investment was made following the group’s largest-ever capital raising of £242.3 million earlier this year.
Shares in Direct Line Insurance (LON:DLG) were up 0.48 percent to 230.60p as of 15:02 UTC, after the largest retail insurer in the UK reported completion of the disposal of its life unit to Chesnara for £39.3 million and confirmed distribution of the proceeds to shareholders via a special dividend of four pence a share, to be paid on December 31.
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