Depressed morning session for FTSE
Mortgage lender Halifax Bank of Scotland led a depressed session for banking stocks and the wider London market today.
The biggest drag on HBOS came from a downgrade by Credit Suisse, although traders also blamed an aggressive move by HSBC into the UK mortgage market.
A subdued finish on Wall Street overnight added to the cautious start to trading, with the FTSE 100 Index 18.6 points lower at 5971.6 by mid-morning after its retreat below the 6,000 mark in the previous session.
The UK’s biggest lender, HBOS, was the biggest faller, off 19.5p to 530p - almost 4% – after HSBC announced it would match homeowners’ existing fixed rate deals. Analysts viewed the move as a push for long-term market share, at a time when rivals are reluctant to write new mortgage business.
Royal Bank of Scotland and Barclays were also on the fallers board – off 6.5p to 367.75p and 11.75p to 466p respectively – although the move did little for HSBC’s share price, which was unchanged at 857p.
Housebuilders meanwhile enjoyed better fortunes after gloomy figures from the Halifax showing a 2.5% fall in prices hit the sector yesterday.
The potential signs of life in the mortgage market meant Persimmon neared the top of the Footsie risers board with a 2% gain, or 14.5p, to 701.5p, recouping some of the losses of the previous session.
In the FTSE 250, Taylor Wimpey gained 6.5p to 176.5p and Barratt Developments was 9.25p higher at 386.25p.
The biggest fall in the second tier came from jeweller Signet, as investors awaited the release of full-year results from the H Samuel and Ernest Jones operator at lunchtime.
Shares were down 2.25p at 59.25p, having fallen from 300p last summer amid warnings from brokers singling out Signet as one of the firms most at risk from a US recession.
