(Sharecast News) – Housebuilders were in favour as UK data showed a bigger-than-expected decline in consumer price inflation, easing pressure on the Bank of England to keep hiking rates.
Danni Hewson, head of financial analysis at AJ Bell, said: “The inflation reading has dampened the outlook for interest rate hikes in the UK, much to the excitement of investors. Two-year gilts fell from 5.079% to 4.842%, sterling fell 0.7% to $1.2937 in the space of 20 minutes and interest rate-sensitive stocks soared on the news.
“Investors are taking the view that if inflation is on a sustained downward path, then the Bank of England might be less eager to keep pushing up interest rates. The market is desperate for that pivot moment where central banks call the end to the current rate rise cycle.
Crest Nicholson surged 13%, Redrow was also higher, while Derwent, Great Portland, and British Land all gained
Hewson said: “Housebuilders had been heavily sold off due to fears a sharp rise in interest rates would destabilise the housing market. While that’s certainly in motion, with plenty of people struggling with higher mortgage rates and a slowdown in property transactions, the valuations of housebuilders were effectively pricing in a deep rut.
“Today’s inflation news has spurred investors with an appetite for risk to go fishing for bargains in the space in the hope that property market won’t experience a severe collapse.”
Market Movers
FTSE 250 (MCX) 19,287.07 3.59%
FTSE 250 – Risers
Crest Nicholson Holdings (CRST) 219.60p 13.31%
British Land Company (BLND) 358.30p 10.31%
Derwent London (DLN) 2,252.00p 10.28%
Future (FUTR) 859.00p 10.13%
Helios Towers (HTWS) 95.45p 9.65%
Grainger (GRI) 252.40p 9.64%
Redrow (RDW) 509.50p 9.05%
Great Portland Estates (GPE) 438.00p 8.74%
Synthomer (SYNT) 79.35p 8.55%
Hammerson (HMSO) 25.60p 8.47%
FTSE 250 – Fallers
Babcock International Group (BAB) 307.60p -0.45%
Vanquis Banking Group 20 (VANQ) 183.00p -0.22%
Twentyfour Income Fund Limited Ord Red (TFIF) 97.00p 0.21%
Network International Holdings (NETW) 386.20p 0.21%
Dechra Pharmaceuticals (DPH) 3,714.00p 0.32%
CMC Markets (CMCX) 152.20p 0.53%
Senior (SNR) 170.40p 0.59%
FirstGroup (FGP) 144.60p 0.63%
Baltic Classifieds Group (BCG) 200.00p 0.70%
Discoverie Group (DSCV) 835.00p 0.72%
