UK stocks at 6-week low as Crest Nicholson leads rout among housebuilders
Reuters
Published Aug 21, 2023 08:28
Updated Aug 21, 2023 17:15
By Shreyashi Sanyal and Shubham Batra
(Reuters) -UK stocks closed at a six-week low on Monday as a profit warning by homebuilder Crest Nicholson (LON:CRST) dented the outlook for the sector, dragging the housing index to its biggest monthly fall since September.
The blue-chip FTSE 100 index edged 0.1% lower, while the midcap FTSE 250 declined for a seventh consecutive session, dropping 1.1%.
The housing sector index slid 3.5%.
Data from website Rightmove showed asking prices for homes in Britain fell sharply this month, as rising mortgage costs prompted sellers to lower their expectations of what they can get for their properties.
It was the biggest monthly fall for August since 2018 and twice as steep as the usual summertime slide.
Crest Nicholson tumbled 8.8% to the bottom of the midcap index after the housebuilder lowered its annual profit expectations.
"A profit warning from UK housebuilder Crest Nicholson has reinforced the challenges facing the housing market in the months ahead with interest rates set to be hiked further next month," said Michael Hewson, chief market analyst at CMC Markets UK.
Both main FTSE indexes have underperformed the broader Europe STOXX 600 index so far this year as an early bounce in commodity prices and reopening hopes in China faded, with the Bank of England's tough stance on inflation also hurting British stocks.
Oil and gas stocks added 0.6% on a rebound in oil prices as global supply tightened with lower exports from Saudi Arabia and Russia. [O/R]
Global markets weren't enthused by Beijing's disappointingly frugal stimulus steps after China's central bank trimmed its one-year lending rate by 10 basis points and left its five-year rate unchanged.
Focus will now shift to the Jackson Hole Symposium later in the week, where major central bankers will share their views on the trajectory of global monetary policy.
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Written By: Reuters
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