Intercontinental Hotels Group is being hit by a downgrade from Morgan Stanley, and its shares are currently the biggest faller in the FTSE 100.
The bank has cut its rating from overweight to equal weight and its price target from £11 to 980p.
Its analysts said: "We remain a long-term supporter of Intercontinental Hotels and think it has an attractive business model. However, US growth is slowing at a faster pace than we thought, Holiday Inn's repositioning is likely to lead to a higher exit rate, and cost inflation of its central support continues. These lead us to cut EPS forecasts by 4%/6%/8% over 2008-2010, and the shares now trade at a 15% premium to best-in-class Marriott."
IHG is down 26.5p to 870.5p, with the FTSE 100 off 12.5 points at 6266.8.
But housebuilders were in focus on hopes for another interest rate cut shortly after the latest Bank of England minutes showed a 9-0 vote for a decrease.
Richard Snook at the Centre for Economic and Business Research said: "The monetary policy committee's decision to cut interest rates by 25 basis points on December 6 was taken unanimously. It had been expected that the decision was much closer, with three or four members voting against the cut. This provides a strong signal that the Bank is now willing to take much stronger action to counteract the credit crunch and paves the way for further interest rate cuts in the new year."
So Persimmon climbed 2% to 784p, Taylor Wimpey the same amount to 200.5p and Barratt Developments 1.7% to 446.75p.
