UK Home Prices Fell

123jump.com Staff
29 Feb, 2008
New York City

UK stocks fell sharply after weak housing market report. Nationwide Building Society reported home prices fell in February by 0.5%, the fourth monthly decline in a row. Annual home price rise declined from 4.2% in January to 2.9% in February. HSBC bank received a bid for its French bank branch network for 2.1 billion euros. Yell Group fell on a broker downgrade. AIG reported a huge loss of $10 billion related to credit markets and Swiss Re reported a loss of $226 million on credit swaps.

[R]2:00PM New York, 7:00PM Tokyo - U.K. home prices fall for the fourth month in a row by 0.5% in February.[/R]

Stocks in U.K. declined after a report by Nationwide Building Society showed that house price fell for the fourth straight month in February.

In London trading FTSE 100 fell 1.36% or 81.4 to 5,884.30, down 0.1% for the month.

Of the 102 FTSE 100 stocks 14 gained, 87 declined, and 1 was unchanged. Rentokil Initial led advancers in the FTSE 100 stocks with a rise of 3.60% followed by Resolution Plc increasing 3.06%.

House Prices Fall

Nationwide Building Society reported today on its web site that house prices fell for the fourth consecutive month at 0.5% for the month in February, while the annual rate of house price inflation fell from 4.2% in January to 2.7% in February.

Nationwide''s Chief Economist Fionnuala Earley said the sector was however in good health as the economy is highly unlikely to shrink into a recession.

Earley added, “While there are several factors which are slowing housing market demand, from poor affordability to weakening house price growth expectations to tighter credit conditions, the fact that an economic recession in the UK seems unlikely provides some support for the overall health of the housing market.”

HSBC to sell regional branches

Bloomberg news reported today that HSBC Holdings might sell its regional branches in France to Banque Federale des Banques Populaires for 2.1 billion euros to focus on emerging markets.

The regional banks are Societe Marseillaise de Credit, Banque de Savoie, Banque Chaix, Banque Marze, Banque Pelletier, Credit Commercial du Sud-Ouest and Banque Dupuy de Parseval.

HSBC, which will be reporting its results on March 3, will retain its asset-management, investment and private banking operations in France.

Gainers & Losers

Rentokil Initial led advancers in the FTSE 100 stocks with a rise of 3.60% followed by rises in Resolution Plc of 3.06%, in Schroders Plc of 1.91%, in Cairn Energy of 1.34%, and in Amec Plc of 1.31%.

Yell Group Plc led decliners in the FTSE 100 stocks with a drop of 9.09% followed by losses in Sage Group of 5.62%, in ICAP of 4.97%, in HBOS Plc of 4.96%, and in Barclays Plc of 4.65%.

Yell Group fell after Bear Stearns downgraded the company to “peer perform” from “outperform”. The stock continues to suffer from the bearish forecast by its U.S. company R.H. Donnelly.

Insurers also fell after Swiss Re announced a $226 million credit default swap mark-to-market loss and after AIG quarterly losses reached a record $5.29 billion. Aviva fell 0.83%, Standard Life shed 2.01%, and Old Mutual declined 0.63%.

In Tokyo Nikkei 225 Index closed lower 322.49 or 2.32% to 13,603.02, in Hong Kong Hang Seng index decreased 260.02 or 1.06% closed to 24,331.67. Australia ASX 200 index decreased 79.10 or 1.40% to close 5,572.10.

In South Korea Kospi Index decreased 24.55 or 1.41% to close at 1,711.62, in Thailand SET index closed higher 3.64 or 0.43% to 845.76 and Indonesia JSE Index edged decreased 34.37 or 1.25% to 2,721.94. Sensex index in India decreased 245.76 or 1.38% to 17,578.72.

In London FTSE 100 Index closed lower 81.40 or 1.36% to 5,884.30, in Paris CAC 40 Index decreased 74.57 or 1.53% to close at 4,790.66 and in Frankfurt DAX index lower 114.39 or 1.67% to close at 6,748.13. In Zurich trading SMI decreased 129.09 or 1.68% to close at 7,533.86.