London open: Housebuilders pace decline on news of CMA probe

(Sharecast News) - London stocks fell in early trade on Monday as investors eyed the release of key US data later this week, with housebuilders under pressure amid news of a probe by the competition watchdog. At 0830 GMT, the FTSE 100 was down 0.2% at 7,693.22.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The FTSE 100 has lost ground in early trading, following muted US futures activity. This of course follows record trading last week, so the slow down signals a pause for breath rather than anything more sinister.

"Investors are looking ahead to the monthly personal consumption expenditures price index reading, which is the Federal Reserve's preferred measure of inflation, on Thursday."

In equity markets, housebuilders were under the cosh after the Competition and Markets Authority said it has started an investigation into eight companies over evidence they may have been sharing information which could be harming competition in the sector.

In a major report released earlier, the watchdog said it had "fundamental concerns" with the operation of the housing market, revolving around the planning system, estate management charges and the quality of new housing.

Companies being investigated are Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry.

Lund-Yates said: "Housebuilder stocks have fallen as the CMA launches a probe into the sector. Concerns include poor customer outcomes from the quality of new homes, with faults on the rise over the last ten years. A major trigger for the investigation is accusations that some major housebuilders are sharing confidential and commercially sensitive information relating to sales prices and sales rates.

"Other criticism is levelled at the UK's overly clunky planning processes, which are contributing to the under-supply of new homes. Seeing rules streamlined could help some of the big listed names shift more houses, but it could also increase competition. The accusations of poor build quality and anti-competitive practice will be of more immediate importance, as findings against either strike could lead to margin degradation in the short term, but this is far from guaranteed."

Elsewhere, distribution specialist Bunzl fell even as it posted a 10% rise in annual profits, lifted its dividend and maintained 2024 profits guidance despite a dip in revenue as inflation started to ease.

Pre-tax profit for 2023 came in at £698.6m on revenue of £11.8bn, down 2%. Shareholders will receive 68.3p a share.

The acquisition-hungry group also announced two more purchases - an 80% stake in UK-based Nisbets for £338m and Pamark in Finland for an undisclosed sum.

Hammerson gained as it agreed the sale of Aberdeen shopping centre Union Square to an affiliate of Lone Star Real Estate Fund VI for £111m in cash.

Market Movers

FTSE 100 (UKX) 7,693.22 -0.17% FTSE 250 (MCX) 19,153.30 -0.14% techMARK (TASX) 4,399.24 -0.06%

FTSE 100 - Risers

Endeavour Mining (EDV) 1,298.00p 2.77% Entain (ENT) 926.00p 1.62% International Consolidated Airlines Group SA (CDI) (IAG) 154.65p 1.24% Rolls-Royce Holdings (RR.) 356.10p 0.85% BAE Systems (BA.) 1,249.50p 0.73% Kingfisher (KGF) 230.70p 0.61% Standard Chartered (STAN) 638.80p 0.60% Smiths Group (SMIN) 1,642.50p 0.49% Beazley (BEZ) 646.50p 0.47% Relx plc (REL) 3,516.00p 0.46%

FTSE 100 - Fallers

Bunzl (BNZL) 3,142.00p -4.96% Persimmon (PSN) 1,371.50p -2.90% Taylor Wimpey (TW.) 141.85p -2.84% Ocado Group (OCDO) 513.40p -2.84% Berkeley Group Holdings (The) (BKG) 4,626.00p -1.87% Rio Tinto (RIO) 5,102.00p -1.83% Barratt Developments (BDEV) 470.10p -1.76% Glencore (GLEN) 369.25p -1.74% Anglo American (AAL) 1,757.20p -1.61% Legal & General Group (LGEN) 239.50p -1.03%

FTSE 250 - Risers

Mobico Group (MCG) 82.10p 3.40% Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 270.50p 2.66% JPMorgan Emerging Markets Inv Trust (JMG) 106.80p 2.30% Ithaca Energy (ITH) 135.50p 2.19% Cranswick (CWK) 3,958.00p 2.01% Discoverie Group (DSCV) 699.00p 1.90% Herald Investment Trust (HRI) 2,095.00p 1.45% Hammerson (HMSO) 26.04p 1.32% Plus500 Ltd (DI) (PLUS) 1,858.00p 1.25% Trainline (TRN) 315.00p 1.22%

FTSE 250 - Fallers

Spirent Communications (SPT) 107.50p -3.76% Future (FUTR) 650.00p -3.63% Watches of Switzerland Group (WOSG) 414.40p -2.63% Bellway (BWY) 2,688.00p -2.61% Redrow (RDW) 648.00p -2.26% Close Brothers Group (CBG) 329.40p -2.26% Sirius Real Estate Ltd. (SRE) 84.30p -2.20% Ibstock (IBST) 159.30p -2.09% Vistry Group (VTY) 1,005.00p -1.95% Auction Technology Group (ATG) 585.00p -1.85%