Home Prices Drop Drag Stocks

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

In London trading, FTSE 100 declined 0.02% or 1.5 to 6,068.10 pulled back by loses in homebuilders. Persimmon dropped nearly 4% after reports that UK home prices fell in May. Of the FTSE 100 index stocks, 41 shares gained, 61 shares declined while 1 stock remained unchanged. UK home prices fell 2.5% in May from April and were 4.4% from a year ago and up 5% from two years ago.

R]1:00PM New York, 6:00PM London - UK stocks fell led by losses in homebuilders, retailers and banks after the UK house prices decline in May.[/R]

Market Sentiment

In London trading, FTSE 100 declined 0.02% or 1.5 to 6,068.10 pulled back by loses in homebuilders. Persimmon dropped nearly 4% after reports that UK home prices fell in May.

Of the FTSE 100 index stocks, 41 shares gained, 61 shares declined while 1 stock remained unchanged.

UK home prices rose in May

House prices in UK fell by 2.5% in May from April, Nationwide Building Society reported on Thursday.

In a statement, posted on its Web site, the fourth largest mortgage lender said prices were 4.4% lower a year, the biggest annual fall since December 1992, but remain 5% higher than 2 years ago.

""The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market. House prices fell by 2.5% during the month, the largest recorded monthly fall in the history of the Nationwide monthly index"", according to the statement on its Web site.

Oil prices remain above $130

World oil prices slid on Thursday but stayed above $130 ahead of the weekly crude oil inventories report in the U.S.

New York''s main oil futures contract, light sweet crude for July delivery, shed 85 cents to $130.20 a barrel and Brent North Sea crude for July lost 93 cents to $130.

Both contracts had hit record levels a week ago, with Brent at $135.14 and New York WTI contract striking $135.09 on fears over tight supplies, before sliding.

Oil prices had breached 130 dollars a barrel for the first time eight days ago when the US government reported unexpected declines in crude and gasoline stockpiles. The crude oil trades at elevated level less than a week before the official start of the peak demand season for motor fuel.

The price of crude oil on international markets has surged by 35% since the beginning of the year and up from $50 dollars per barrel 18 months ago.

Gainers and losers

Of the FTSE 100 index shares, Persimmon led the decliners with a loss of 5.12% to 487.50 pence followed by losses in Hbos Plc of 3.9%, in Wolseley Plc of 3.5% to 537.50 pence, in Home Retail of 3.1% to 228.75 pence and in Kingfisher of 2% to 135.70 pence.

Of the UK shares, MAN Group Plc led the gainers with a rise of 5.2% to 619.00 pence after reporting a 60% rise in pretax profit and doubling the dividend. Stanley Fink will step down as Man''s deputy chairman in July.

The other gainers in the FTSE 100 index included Eurasia Natural with a rise of 5% to 1,481 pence followed by gains in Cairn Energy of 3.1% to 3,419 pence, in Old Mutual of 3.1% to 115.50 pence and in Tullow Oil of 2.7% to 922.06 pence.

BG Group rose 0.3% to 1,294.00 pence on news reports that the company is closer to securing one of Australia''s largest energy companies after lifting the terms of its cash offer for Origin Energy to at least A$13.2 billion.

World markets review

In Tokyo Nikkei 225 Index closed higher 415.03 or 3.03% to 14,124.47, in Hong Kong Hang Seng index climbed 134.48 or 0.55% closed to 24,383.99. In Australia ASX 200 index climbed 61.30 or 1.09% to close 5,709.40. In Malaysia KL Composite index increased 1.24 or 0.10% to close at 1,261.82.

In South Korea Kospi Index increased 35.58 or 1.97% to close at 1,841.22, in Thailand SET index decreased 2.38 or 0.29% to 830.61 and Indonesia JSE Index edged increased 13.18 or 0.52% to 2,446.95. Sensex index in India fell 209.11 or 1.27% to 16,316.26.

In London FTSE 100 Index closed lower 1.5 or 0.02% to 6,068.10, in Paris CAC 40 Index increased 0.10% to close at 4,975.90 and in Frankfurt DAX index higher 21.19 or 0.30% to close at 7,055.03. In Zurich trading SMI increased 67.26 or 0.90% to close at 7,541.76.