UK Home Prices Fall, Weak Confidence

123jump.com Staff
30 Apr, 2008
New York City

UK consumer confidence falls to the lowest level in the last sixteen years on worries related to general economic conditions and weak housing market. Nationwide Building Society reported today that U.K house prices declined 1% to

[R]1:00AM New York, 5:00PM London-U.K house prices fall 1% in April. U.K. consumer confidence declines to the lowest since 1992.[/R]

Stocks in London fell after reports showed that U.K house prices fell in April and consumer confidence fell the most since 1992.

Market sentiment

In London trading FTSE 100 slipped 0.03% or 2.1 at 6.087.30.

Of the 102 FTSE100 stocks 65 gained, 36 declined, and 11 were unchanged. Home Retail Group led advancers in the index shares with a rise of 8.75%.

U.K. consumer confidence at the lowest since 1992

GfK NOP reported today that the consumer confidence dropped five points to minus 24 in April.

Rachael Joy in the Consumer Confidence team at GfK NOP commented, ""Consumer confidence is at its lowest since level since November 1992. This month’s drop has been mainly driven by dropping confidence in the general economy over the last 12 months. With the news dominated by stories of recession, the credit crunch, housing market falls, and future petrol and food price increases, it will take more than a quarter point reduction in interest rates to alleviate the current gloomy mood of the UK consumer.”

According to the report the consumer confidence fell as the index gauging changes in personal finances has dropped by 4 points to minus 8, which is 8 points lower than last year.

Also the forecast for personal finances over the next year has also declined 4 to 0; eleven points lower than this time last year.

In addition, the measure for the general economic situation of the country during the last twelve months fell 10 points to minus 53, which is 25 points lower at the same time last year. Expectations for the general economic situation over the next twelve months have dropped 6 points to minus 38.

U.K. house prices decline 1% in April

Nationwide Building Society reported today that U.K house prices declined 1% to £178,555 in April from a year earlier as the credit crunch affect new home purchases.

The mortgage lender also forecasts prices may decline as much as 5% this year.

Gainers & Losers

Home Retail Group led advancers in the FTSE 100 index shares with a rise of 8.75% followed by increases in Admiral Group of 6.15%, in Cairn Energy of 4.47%, in Carphone Warehouse of 3.52%, and Smith & Nephew of 3.48%.

BG Group led decliners in the FTSE 100 index shares with a drop of 5.89% followed by losses in Vedanta Resources of 4.47%, in Kazakhmys of 4%, in Eurasian Natural of 3.77%, and HBOS Plc of 3.34%.

Other commodity stocks also increased as well. Rio Tinto Plc fell 1.65%.

Financial stocks also slumped on fears over the health of the global economy. Alliance & Leicester fell 2.27%, the Royal Bank of Scotland shed 1.64% and Lloyds TSB Group fell 1.42%.

World markets review

In Tokyo Nikkei 225 Index closed lower 44.38 or 0.32% to 13,849.99, in Hong Kong Hang Seng index decreased 158.80 or 0.61% closed to 25,755.35. In Australia ASX 200 index lower 11.50 or 0.21% to close 5,595.40. In Malaysia KL Composite index decreased 3.79 or 0.30% closed to 1,279.86.

In South Korea Kospi Index increased 13.96 or 0.77% to close at 1,825.47, in Thailand SET index closed lower 1.18 or 0.14% to 832.45 and Indonesia JSE Index edged increased 0.99 or 0.04% to 2,304.52. Sensex index in India decreased 91.15 or 0.52% to 17,287.31.

In London FTSE 100 Index closed lower 2.10 or 0.03% to 6,087.30, in Paris CAC 40 Index increased 19.44 or 0.39% to close at 4,996.54 and in Frankfurt DAX index higher 63.48 or 0.92% to close at 6,948.82. In Zurich trading SMI increased 67.00 or 0.90% to close at 7,529.00.