London close: Under-pressure housebuilders drag stocks lower

(Sharecast News) - London stocks were in negative territory at the close on Monday, with housebuilders under particular pressure as the bill for cladding repairs grew.
The FTSE 100 ended the session down 0.53% at 7,445.25, and the FTSE 250 was 1.5% weaker at 23,001.81.

Sterling was mixed, last trading 0.15% weaker against the dollar at $1.3568, while it gained 0.09% on the euro to change hands at €1.1975.

"It's been a broadly weaker session for European shares today, as we start a new week with higher yields and inflation worries continuing to temper appetite for risk," said CMC Markets chief market analyst Michael Hewson.

"The prospect of a faster pace of US rate rises has continued to keep markets on edge, with losses accelerating as US markets reopened after the weekend.

"While the Nasdaq 100 has plunged to its lowest levels in 10 weeks, the FTSE 100 appears to be holding up a little better than its peers, helped by outperformance in financials, as well as consumer staples."

On the economic front, footfall at UK retail destinations fell last week, with data from retail analyst Springboard suggesting central London suffered the biggest decline amid work-from-home guidance.

Footfall dropped 6% from the week before, with central London seeing a 25.6% slump.

The decline on local high streets was far more modest, however, with footfall in market towns down 2.8%, and up 2% in outer London.

"Somewhat inevitably - given that last week was the first return to work for many after the Christmas and New Year period - footfall declined from the week before," said Springboard insights director Diane Wehrle.

"Indeed, this is a familiar result in the first week of the year, having occurred every year since 2011, and the magnitude of the drop in footfall last week was almost identical to that in the same week in 2019 and slightly lower than in the same week in 2020."

In equity markets, housebuilders were on the back foot, with Persimmon down 5.15%, Barratt Developments losing 4.87%, Berkeley off 3.63%, Taylor Wimpey declining 3.47%, Bellway behind by 4.02%, Countryside Properties 4.45% below the waterline, Vistry 2.94% into the red, Crest Nicholson slipping 1.84%, and Redrow sliding 4.49%.

Those moves came on the back of news the government would seek an extra £4bn from property developers to fund cladding repairs on low-rise flats.

"Included in the plan, developers must produce a strategy to protect leaseholders from becoming trapped in homes that are currently unsaleable," CMC's Michael Hewson commented.

"The costs of any plan could be as high as £4bn with the government warning that any developers that don't sign up to the scheme by March could be blocked from participating in any future government schemes, as well as running the risk of facing new levies on the industry.

"Persimmon and Barratt Developments are amongst the biggest fallers, with Persimmon also on the receiving end of a downgrade from buy to neutral by Citigroup."

Elsewhere, luxury car maker Aston Martin Lagonda was in the red by 4.07%, with traders pointing to a Sunday Times share tip suggesting investors sell the stock.

Bakery chain Greggs slumped 5.81% on the news it was hiking the price of its famous sausage rolls.

On the upside, British Airways and Iberia owner IAG gained 1.07%, engine marker Rolls-Royce managed gains of 0.41%, Cineworld Group rocketed 8.03%, and budget airlines easyJet and Wizz Air ascended 1.93% and 2.32% respectively, as concerns over the Omicron variant of Covid-19 eased.

British American Tobacco was in the black by 1.74% after Barclays upped its price target on the stock to 3,400p from 3,300p.

The bank, which kept its 'overweight' rating on the shares, said BAT was at an inflection point.

"BAT has been a frustrating stock to own over the last three years, with a total return of circa 41% versus 50% for the MSCI World Staples Index," Barclays wrote.

"We think this will now change due to two catalysts."

It noted that BAT would start repurchasing shares soon, and pointed out that it would soon start breaking out of next-generation product contribution losses.

Drinks bottler Coca-Cola HBC was boosted 2.18% by an upgrade to 'buy' at Bank of America Merrill Lynch.

ITV rose 1.36% after an upgrade to 'outperform' at Exane, while Tate & Lyle gained 2.08% from the same rating upgrade.

Plus500 rallied 3.13% after saying it had delivered an "outstanding" operational and financial performance throughout 2021, ahead of market expectations.

Market Movers

FTSE 100 (UKX) 7,445.25 -0.53%
FTSE 250 (MCX) 23,001.81 -1.50%
techMARK (TASX) 4,457.25 -0.66%

FTSE 100 - Risers

Vodafone Group (VOD) 117.60p 2.62%
Coca-Cola HBC AG (CDI) (CCH) 2,679.00p 2.49%
BAE Systems (BA.) 572.40p 2.40%
HSBC Holdings (HSBA) 492.00p 2.01%
British American Tobacco (BATS) 2,873.00p 1.88%
Smith & Nephew (SN.) 1,320.50p 1.58%
London Stock Exchange Group (LSEG) 7,172.00p 1.47%
Associated British Foods (ABF) 2,081.00p 1.46%
Hargreaves Lansdown (HL.) 1,391.00p 1.46%
Sainsbury (J) (SBRY) 279.10p 1.42%

FTSE 100 - Fallers

Spirax-Sarco Engineering (SPX) 14,215.00p -6.54%
Ashtead Group (AHT) 5,700.00p -5.91%
Experian (EXPN) 3,229.00p -5.42%
Persimmon (PSN) 2,657.00p -4.90%
Scottish Mortgage Inv Trust (SMT) 1,139.00p -4.89%
Barratt Developments (BDEV) 699.60p -4.87%
Halma (HLMA) 2,840.00p -4.51%
Croda International (CRDA) 9,034.00p -4.48%
Rightmove (RMV) 732.40p -4.24%
Ferguson (FERG) 12,355.00p -3.78%

FTSE 250 - Risers

Cineworld Group (CINE) 40.14p 8.16%
TP Icap Group (TCAP) 164.50p 4.13%
Plus500 Ltd (DI) (PLUS) 1,482.00p 3.13%
Mitchells & Butlers (MAB) 264.00p 2.48%
LXI Reit (LXI) 146.80p 2.37%
Wizz Air Holdings (WIZZ) 4,810.00p 2.32%
C&C Group (CDI) (CCR) 235.20p 2.17%
Tate & Lyle (TATE) 695.40p 2.08%
easyJet (EZJ) 635.80p 1.93%
Ibstock (IBST) 199.30p 1.58%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 1,340.00p -6.94%
Moonpig Group (MOON) 356.00p -6.32%
Dr. Martens (DOCS) 349.20p -6.08%
Trustpilot Group (TRST) 278.00p -5.97%
Greggs (GRG) 2,884.00p -5.81%
Auction Technology Group (ATG) 1,236.00p -5.79%
Future (FUTR) 3,354.00p -5.73%
Allianz Technology Trust (ATT) 308.50p -5.72%
Edinburgh Worldwide Inv Trust (EWI) 250.50p -5.50%
JTC (JTC) 843.00p -4.85%