The boom in housebuilding shares didn't last long. After yesterday's rises in the sector, fuelled mainly by takeover hopes and news that hedge fund Tosca had taken stakes in Redrow and Taylor Wimpey, today was a different story.
The main negative was a Nationwide survey this morning showing that house prices fell in March for the fifth month in a row.
So Persimmon has fallen 50p to 739.5p, Barratt Developments is down 33p to 405p and Bellway is 40p lower at 845p.
Still with property, investment firm Mapeley has slumped 16.5% to £13 after announcing bid talks had ended. The rumoured predator was US hedge fund Fortress, which owns more than 50% of Mapeley.
Pub groups were in focus after Punch Taverns, up 20p to 538p, backed out of a proposed merger with rival Mitchells & Butlers, up 6p to 335.5p. But Punch said it was still considering a possible bid with a third party.
And Enterprise Inns jumped 38p to 402p despite warning of difficult trading conditions and shelving a £750m refinancing. But investors were encouraged by news that it was examining detailed plans to convert into a tax-efficient real estate investment trust, without a demerger into an operating and a property company.
Landsbanki said: "We estimate that attaining REIT status would be worth an additional
150p+ to the fair value of the group. Refinancing will be delayed until the
REIT outcome is more certain and/or credit markets open."
Meanwhile the miners have been lifted by a positive note from Deutsche Bank, with Antofagasta, Anglo American, Vedanta Resources all up around 4%.
This has helped lift the FTSE 100 8.5 points to 5726.0, but the housebuilding effect means the FTSE 250 is down 20.8 points at 9961.2.
Directories group Yell fell 4p to 152p. The company, recently ejected from the FTSE 100, is caught in the slipstream of another warning from a US competitor.
Analysts at Kaupthing said: "US competitor Idearc shares dropped over 9% yesterday after it confirmed that revenues and margins would be lower (guiding down 5% versus "slightly lower" previously). This happened after the UK market closed. The company also cancelled its dividend flying in the face of its previously described "strong dividend program". The company claims it has no liquidity problems. The revenue guidance is in line with the recent warning from RH Donnelley.
"Whilst we doubt Yell has missed consensus forecasts for the year to March 2008, consensus growth for the US is currently +0.5% for 2009, hardly racy, but still a significant margin ahead of peers. Applying a 5% chop to US revenues would cut group earnings by about 5%.
"Yell claims more competitive pricing, better online product and better sales (plus they wisely use direct debit) so it could be that Yell is taking share. After the recent bounce in Yell's shares they may take a knock today on the back of this news and the leverage issue. Yell has still to officially confirm its covenants and could benefit from clarification on this and trading."
Finally, after the Terminal 5 chaos: BA watch. The airline's shares are now down 7.5p at 239.75p, near the day's low. BAA owner Ferrovial is 1.5% lower.
