Crest Nicholson profits spark off building sell-off

LONDON

A DROP in profits at Crest Nicholson sparked a sell-off in housebuilding stocks yesterday, pushing the FTSE 100 into the red.

London’s blue chip index ended down 0.4 per cent or 33.62 points at 7,703.81 points.

Property developers and home builders were among the worst performers, with Barratt Developments falling 18p to 561p, Berkeley Group Holdings down 119p to 4,186p, and Persimmon dropping 70p to 2,790p.

It was sparked by disappointing results from Crest Nicholson, which reported a 2% fall in half-year pre-tax profits to £74.8 million. The group said margins would also remain under pressure next year, as sales of higher-priced properties are set to continue falling.

The FTSE 250-listed housebuilder ended the day down more than 4% or 18.2p at 428p.

Sector peer Bellway tumbled 122p to 3,287p after highlighting signs of a faltering British property market, having confirmed cooling price growth.

The Newcastle-based housebuilder said that, while pricing was generally “firm”, the rate of growth had eased back in 2018.

Across Europe, the French Cac 40 closed lower by nearly 0.4% while the German Dax was flat. In currency markets, the pound received a boost as Parliament voted on EU Withdrawal Bill amendments.

Sterling was up 0.3% against the US dollar at 1.341 and rose 0.3% versus the euro to 1.138. Investors were also digesting jobs data which showed the unemployment rate holding steady at 4.2%, though average earnings increased 2.5% in the year to April, down by 0.1% on the previous month.

Brent crude prices were flat at $76.44 per barrel, with investors pausing ahead of an OPEC meeting in Vienna this month.

In UK stocks, British American Tobacco fell 66.5p at 3,680p as the Lucky Strike and Dunhill maker warned that foreign exchange rates could impact operating profits by 8% for the first half and 6% for the full year.

However, the company insisted it would still deliver solid full-year earnings growth.

Away from the top tier, Dominos was the worst performer on the FTSE 250, falling 23.9p to 361.4p after announcing the departure of its chief financial officer Rachel Osborne. It has launched a hunt for her replacement.

Shares in retailer Ted Baker slumped 40p to 2,346p. While the company reported a 4.2% rise in group sales over the 19 weeks to June 9, the company noted that it was still facing an “uncertain consumer outlook”.

Investors also ditched Boohoo.com shares, which fell 2.1p to 218p, despite a 53% jump in first quarter sales to £183.6 million.

The biggest risers on the FTSE 100 were Mediclinic International up 21.8p at 565.4p, Centrica up 5.4p at 150p, Evraz up 14.8p at 551.8p, and Kingfisher up 8.1p at 312.8p.

The biggest fallers on the FTSE 100 were Anglo American down 60.6p at 1,812.6p, Barratt Developments down 18p at 561p, Berkeley Group Holdings down 119p at 4,186p, and Persimmon down 70p at 2,790p.

NEW YORK

US stocks ended slightly higher yesterday, boosted by gains in technology and utilities shares, though investors were cautious ahead of the Federal Reserve’s policy decision.

The Fed is widely expected to raise interest rates for the second time this year when it concludes its policy meeting today.

Investors are focused on how the Fed characterises its monetary policy, looking for hints if it would move to raise rates three or four times this year.

But shares of S&P 500 utilities, up 1.3 per cent, and technology, up 0.6%, helped to lift the S&P 500.

Investors also awaited a court ruling that would decide the fate of AT&T Inc’s $85 billion offer for Time Warner. Shares of AT&T ended up 0.5%, while Time Warner was flat and Charter Communications gained 2.8%.

“The Time Warner ruling has ramifications for other potential deals, so I think people are gearing up for that,” said Michael O’rourke, chief market strategist at Jonestrading in Greenwich, Connecticut.

Investors appeared to shrug off a historic Us-north Korea summit. President Donald Trump and North Korean leader Kim Jong-un pledged to work toward complete denuclearisation of the Korean peninsula.

The Dow Jones fell 1.58 points to 25,320.73, the S&P 500 gained 4.85 points to 2,786.85 and the Nasdaq Composite added 43.87 points to 7,703.79.