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ADVFN Morning London Market Report: Monday 26 February 2024

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London open: Housebuilders pace decline on news of CMA probe

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London stocks fell in early trade on Monday as investors eyed the release of key US data later this week, with housebuilders under pressure amid news of a probe by the competition watchdog.

At 0830 GMT, the FTSE 100 was down 0.2% at 7,693.22.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has lost ground in early trading, following muted US futures activity. This of course follows record trading last week, so the slow down signals a pause for breath rather than anything more sinister.

“Investors are looking ahead to the monthly personal consumption expenditures price index reading, which is the Federal Reserve’s preferred measure of inflation, on Thursday.”

In equity markets, housebuilders were under the cosh after the Competition and Markets Authority said it has started an investigation into eight companies over evidence they may have been sharing information which could be harming competition in the sector.

In a major report released earlier, the watchdog said it had “fundamental concerns” with the operation of the housing market, revolving around the planning system, estate management charges and the quality of new housing.

Companies being investigated are BarrattBellwayBerkeleyBloor HomesPersimmonRedrowTaylor Wimpey, and Vistry.

Lund-Yates said: “Housebuilder stocks have fallen as the CMA launches a probe into the sector. Concerns include poor customer outcomes from the quality of new homes, with faults on the rise over the last ten years. A major trigger for the investigation is accusations that some major housebuilders are sharing confidential and commercially sensitive information relating to sales prices and sales rates.

“Other criticism is levelled at the UK’s overly clunky planning processes, which are contributing to the under-supply of new homes. Seeing rules streamlined could help some of the big listed names shift more houses, but it could also increase competition. The accusations of poor build quality and anti-competitive practice will be of more immediate importance, as findings against either strike could lead to margin degradation in the short term, but this is far from guaranteed.”

Elsewhere, distribution specialist Bunzl fell even as it posted a 10% rise in annual profits, lifted its dividend and maintained 2024 profits guidance despite a dip in revenue as inflation started to ease.

Pre-tax profit for 2023 came in at £698.6m on revenue of £11.8bn, down 2%. Shareholders will receive 68.3p a share.

The acquisition-hungry group also announced two more purchases – an 80% stake in UK-based Nisbets for £338m and Pamark in Finland for an undisclosed sum.

Hammerson gained as it agreed the sale of Aberdeen shopping centre Union Square to an affiliate of Lone Star Real Estate Fund VI for £111m in cash.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Standard Chartered Plc +2.46% +15.60 650.60
2 Easyjet Plc +2.24% +12.20 558.00
3 International Consolidated Airlines Group S.a. +1.54% +2.35 155.10
4 Rolls-royce Holdings Plc +1.27% +4.50 357.60
5 Barclays Plc +1.03% +1.68 165.42
6 Pearson Plc +0.80% +7.60 960.80
7 Lloyds Banking Group Plc +0.79% +0.36 45.86
8 Smurfit Kappa Group Plc +0.68% +22.00 3,270.00
9 Hiscox Ltd +0.64% +7.00 1,097.00
10 Rentokil Initial Plc +0.63% +2.70 431.50

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Bunzl Plc -4.72% -156.00 3,150.00
2 Ocado Group Plc -4.16% -22.00 506.40
3 Burberry Group Plc -2.49% -32.50 1,271.50
4 Centrica Plc -2.31% -2.95 124.70
5 Rio Tinto Plc -2.23% -116.00 5,081.00
6 Bhp Group Limited -2.06% -47.50 2,260.50
7 Anglo American Plc -2.03% -36.20 1,749.80
8 Persimmon Plc -1.95% -27.50 1,385.00
9 Fresnillo Plc -1.60% -7.60 466.80
10 Glencore Plc -1.49% -5.60 370.20

 

Monday newspaper round-up: Ryanair, retailers, solar farms

Peak summer air fares in Europe are likely to rise again this year by up to 10%, according to Ryanair, as problems with aircraft at Boeing and Airbus leave customers scrambling for seats. The increase would come on top of the sharp post-pandemic rise in holiday flight prices last year when pent-up demand met limited capacity in European airlines.- Guardian

More than half of UK retailers and exporters have been affected by the disruption to Red Sea trade from Houthi rebel attacks on cargo ships, research by a leading business lobby group suggests. The price of shipping a container from Asia to Europe has gone up by as much as 300% for some businesses, while logistical delays have added up to three to four weeks to delivery times, according to the survey by the British Chambers of Commerce (BCC). – Guardian

A project to power Britain using solar farms thousands of miles away in the Sahara is moving a step closer to fruition as its backers prepare to commission the world’s biggest cable-laying ship. The 700ft vessel will lay four parallel cables linking solar and wind farms spread across the desert in Morocco with a substation in Alverdiscott, a tiny village near the coast of north Devon. – Telegraph

Abolishing inheritance tax would increase Britain’s workforce by 300,000 because it would encourage people not to retire early, economists backed by Liz Truss have argued. Analysis by the Growth Commission claimed the number of people in work would increase by 1.1 per cent if the tax was removed. – Telegraph

Spending on Facebook and Instagram advertising by the two main political parties is more than 10 times higher this year compared to the start of 2023, Sky News can reveal. Spending on social media by Labour and the Conservatives is due to dramatically escalate through the course of the year due to spending and data rule changes which benefit the two main parties. – Sky News

 

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