UK Home Prices Fall; Miners, Energy Stocks Gain

123jump.com Staff
15 Dec, 2008
New York City

UK home prices dropped in December and are likely to fall further in the next year, according to a private survey conducted by Rightmove. The survey estimates rising distressed sales in the next twelve months. In trading, stocks edge higher on a rebound in metal and oil futures.

[R]1:00PM New York, 6:00PM London - U.K. home prices drop 2.3% in December. HSBC has $1 billion exposure to failed Madoff Investment in New York.[/R]

U.K. stocks fell marginally after a report showed that house prices declined 2.3% in December.

Losses were pared on rising commodity stocks as oil rebounded on the expectations that OPEC may lower production.

In London trading FTSE 100 index fell 0.1% or 2.79 to 4,277.56.

Of the FTSE 100 index stocks 45 rose, 52 declined, and 5 were unchanged. Antofagasta led gainers in the index shares with a rise of 4.9% after crude oil prices for January delivery surged 5% to $48.57 per barrel.

U.K. House Prices Fall 2.3% in December

Rightmove Plc reported today that U.K. house prices dropped 2.3% from a month ago and 6.3% from a year earlier to £217,808 in December.

The company forecasts that 2009 will be the “Year of the Property Deal” and estimated more distressed sale.

Rightmove said asking prices are 10.2% below the peak prices in May, while housing prices are forecasted to drop additional 10% by the end of 2009.

Estate agents are reporting sales are reporting deal prices 25% below the peak in May.

Rightmove Plc commercial director Miles Shipside said, “On the basis that prices actually being achieved have fallen by a quarter, we predict that overall prices are now within 10% of bottoming out. Due to the lack of both mortgage finance and confidence, the rapidity of the deliveries is such that we are likely to see prices in 2009 at levels that persuade cash rich and mortgage ready buyers to re-enter the market in greater numbers.”

HSBC Exposure to Madoff Investments, $1 billion

HSBC noted today that it has provided financing to a small number of institutional clients who invested in funds with Madoff Investment Plc with total exposure of $1 billion.

HSBC however notes that it does not believe that these custodial arrangements should be a source of exposure to the bank.

Gainers & Losers

Antofagasta led advancers in the FTSE 100 index shares with a rise of 4.9% followed by increases in BHP Billiton of 4.6%, in British Land Co. of 3.6%, in BG Group of 3.5%, and Cobham of 3.1%.

Antofagasta rose after crude oil for January delivery soared 5% to $48.57 a barrel after OPEC Secretary General Abdalla El-Badri said the member nations need to make sizeable production cuts.

3i Group led decliners in the FTSE 100 index shares with a fall of 10.3% followed by losses in Centrica Plc of 7.2%, in Drax Group of 4.5%, in Aviva Plc of 3.2%, and Barclays Plc of 2.8%.