Newspaper article The Journal (Newcastle, England)

Rates Speculation Hits House Builders; Stocks and Shares

Newspaper article The Journal (Newcastle, England)

Rates Speculation Hits House Builders; Stocks and Shares

Article excerpt

THE FTSE 100 Index closed sharply lower, falling 135.5 points to 6586.1. On a day that saw only seven risers in the blue-chip index, banking and house builders led the decline.

Fears that US banking giant, Citigroup, would have to cut its dividend or sell assets to meet capital requirements following sub-prime debt losses, and sector downgrades from investment banks CIBC World Markets and Morgan Stanley saw the heavyweight banking sector fall 3.5% alone.

Speculation that the Bank of England was unlikely to follow the lead of the US and cut rates when it meets next week led to heavy losses for house builders and property groups.

Among those losers were The Journal North 40 constituents Barratt Developments, down 27.5p to 625p, and Bellway, falling 44p to 1031p. Also affecting the property sector was information from Hometrack, the property information specialist, who predicted a fall in house price growth to just 1% in 2008, and forecasted a 1.5% fall in the North-East. …

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