FTSE 100 movers: Housebuilders, retailers slump

(Sharecast News) - London's FTSE 100 was up 0.3% at 7,040.83 in afternoon trade on Monday. Housebuilders were under the cosh amid concerns the Bank of England will have to ramp up interest rates, increasing borrowing costs further. Persimmon, Taylor Wimpey, Berkeley and Barratt were all weaker.

In a note on the sector, Liberum said: "The mini-Budget was very helpful for the housebuilders in boosting consumer cash flows, reducing stamp duty and cutting their taxes. But, the bond market's reaction to the announcement in general has created another step up in interest rates.

"We had expected stability in the housing market next year based on energy bill support and mortgage rates peaking at 4%, but even with the boost from personal tax cuts, the outlook is more precarious with mortgage rates likely to reach 5% or more if bond yields remain at this level. We will update our thoughts on the sector in due course but note for now that valuations continue to discount a worse outlook than seems likely, especially as forced selling is unlikely to be seen in any meaningful scale."

Retailers were also down, with Next and discount retailer B&M in the red as sterling tumbled.

Steve Clayton, fund manager at HL Select, said: "Retailers and other businesses who buy their inventory in from abroad face a loss of earnings. They can try to pass the higher cost of imported goods on to consumers, or they can try to cut their operating costs. But the speed with which sterling has fallen is going to prove a huge challenge."

FTSE 100 - Risers

Smiths Group (SMIN) 1,533.00p 2.89% Fresnillo (FRES) 708.60p 2.67% Spirax-Sarco Engineering (SPX) 10,055.00p 2.54% Rolls-Royce Holdings (RR.) 73.63p 2.43% Reckitt Benckiser Group (RKT) 6,146.00p 2.43% Sage Group (SGE) 705.00p 2.17% Hargreaves Lansdown (HL.) 851.80p 2.06% Haleon (HLN) 282.85p 1.95% Halma (HLMA) 2,101.00p 1.94% Ashtead Group (AHT) 3,901.00p 1.88%

FTSE 100 - Fallers

Persimmon (PSN) 1,261.00p -6.59% Taylor Wimpey (TW.) 96.60p -6.35% Berkeley Group Holdings (The) (BKG) 3,297.00p -5.37% Barratt Developments (BDEV) 385.80p -4.98% Severn Trent (SVT) 2,420.00p -4.84% United Utilities Group (UU.) 936.80p -4.45% National Grid (NG.) 975.60p -3.69% Next (NXT) 5,284.00p -3.68% Land Securities Group (LAND) 516.20p -3.66% B&M European Value Retail S.A. (DI) (BME) 307.10p -3.46%