Sun, 16th Jun 2019
The FTSE 100 gained just over 16 points on Wednesday, while housebuilder Persimmon released an update that disappointed investors and soured sentiment towards the housebuilding industry.
Persimmon’s update said that they had seen local sales in line with expectations, but the lack of detail in the update left some questioning the future for the sector, and led to rivals Barratt Development, Bovis Homes, Taylor Wimpey, Crest Nicholson and Redrow also struggling. Analysts at Shore capital noted that they were continuing to see new headwinds for housebuilders, and a softening of the market climate, which means a much weaker outlook for pricing. This, alongside rising costs and reduced confidence in pricing for both buyers and estate agents - spells difficulties ahead for the sector.
Meanwhile, Marks and Spencer endured a turbulent trading day, but ended up by 1.6 percent after they published their results. The company had seen a lower than expected fall in profits for the first half, and said that it planned to accelerate its turnaround strategy. It also announced that it now planned to open fewer Simply Food branches than it had previously stated.
George Salmon, an analyst for Hargreaves Landsdown, said that we were seeing the impact of slightly weaker UK consumers coming in through the results for the high street retailers. He said that the upcoming results from Sainsbury and Halfords would probably highlight this.
Meanwhile, SSE shed 0.8 percent after the energy company announced that it would be merging its retail arm with Innogy, the owners of Npower.