Johnson Matthey Share News (JMAT)

LONDON (Alliance News) - UK stock indices were slightly in the red on Thursday, as trading volumes dried up with the US on holiday for Thanksgiving Day, while shares in estate agent Countrywide provided the most drama among mid- and large-caps, hitting an all-time low after releasing a downbeat trading update.

Countrywide had been as the biggest faller in the FTSE 250 index on Wednesday, after UK Chancellor of the Exchequer Philip Hammond confirmed speculation that letting agent fees for tenants on private rented sector properties will be banned in the Autumn Statement.

On Thursday, the stock's woes continued, after Countrywide said it expects property sale volumes for 2016 to be 6.0% below 2015, and they are likely to fall further in 2017.

Countrywide said transactional activity in the UK residential property market has remained challenged since the end of its first half on June 30. It cited a combination of changes in UK stamp duty and the European Union referendum outcome as the reason why transaction levels were currently running below 2015.

Countrywide expects transaction volume declines in both 2016 and 2017. The slowdown in activity is "clearly evident" from the closing pipelines of Countrywide's Retail and London businesses, the group said. At the end of September, pipelines were down 16% and 26% respectively.

At midday the stock traded down 12% to 170.62p. Earlier it set a new record low of 165.90p. Countrywide listed in London in March 2013 at 350p.

The FTSE 100 index was down 0.3%, or 22.53 points, at 6,795.18. The FTSE 250 was down 0.4% at 17,558.06, while the AIM All-Share was up 0.3% at 817.51.

The BATS 100 index was down 0.4% at 11,490.96, and the BATS 250 was down 0.2% at 15,916.38. The BATS Small Companies index was flat at 10,938.73.

In Europe, the CAC 40 index in Paris was up 0.2% and the DAX 30 in Frankfurt was up 0.1%.

German gross domestic product was a notable release in a light economic calendar on Thursday. GDP expanded 0.2% sequentially in the third quarter, slower than the 0.4% growth seen in the second quarter. The quarter-on-quarter growth came in line with the estimate published on November 15.

On the London Stock Exchange, broker rating changes and ex-dividend stocks were the biggest movers on the FTSE 100 of blue-chips.

UK power grid operator National Grid was the worst performer, down 2.5%, after going ex-dividend, while platinum company Johnson Matthey was down 1.3% for the same reason.

Direct Line Insurance Group was the best performer, up 3.8%, after it was upgraded to Overweight from Equal Weight by Morgan Stanley.

"Direct Line's investment in growing its own-brand policies should lead to higher return-on-equity and greater customer retention," said Morgan Stanley analyst Janet Demir. "Direct Line's own brands – Direct Line and [motor insurance] Churchill – are performing well and continue to be positioned as service- rather than price-led."

Intertek was up 0.8% after Societe Generale lifted the stock to Hold from Sell. The French bank noted the recent fall in the testing, inspection and certification services provider's share price and believes fundamentals now look fairly priced.

In the FTSE 250, Pets At Home Group was a notable faller, down 7.8%. The pet products retailer and veterinary services provider reported growth in profit in the first half of its financial year as revenue rose across the business, and it said its full-year profit outlook remains in line with market expectations, despite seeing softer trading in the second half so far.

Pets at Home noted that trading has been softer in recent weeks than in the first half, but said its full-year profit outlook remains in line with market expectations.

Domino's Pizza Group led the mid-cap gainers, up 3.6%. The pizza delivery company said it is increasing its long-term target for UK store expansion, given the "continued strong new store performance" it has achieved.

The group said it now aims to operate from 1,600 stores in the UK in the long term, expecting to run 950 stores by the end of 2016. According to Domino's, this reflects its "successful" strategy of splitting territories to improve efficiency and service to customers by shortening drive times, which leads to higher sales.

Outside the UK, Domino's has identified opportunities for a total of 400 stores, which will be up from around 100 at the end of 2016.

Helical reported its net rental income grew in its first half, and it made a net gain on the sale and revaluation of its investment portfolio against a background of uncertainty.

The property developer said its net asset value per share rose 3.0% in the six months ended September to 471.00 pence from 456.00p, after Helical's total comprehensive income increased.

Helical said its net rental income rose to GBP24.6 million from GBP20.8 million the prior year, and said its portfolio at the half year reflected passing rents of GBP39.0 million, contracted rents of a further GBP13.0 million and an estimated rental value of GBP78.0 million.

The stock was the best performer in the FTSE All-Share, up 11%.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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