FTSE drops as property firm shares sink
The FTSE is in the red this morning courtesy of a 5.5% decline in share prices of house builder Barratt Developments (LON:BDEV) which was triggered by fresh data showing declining sales in the UK housing market.
The fact that Brexit is eroding the UK housing sales is no longer news, but as it has been going on for close to three years now and as the current tensions between the Prime Minister and Europe are offering no clear end point to the situation, the damage to property businesses is beginning to assert itself more and more.
The data is showing that price declines are worst in the London area with the rest of the country holding slightly better.
Miners gain on hopes of trade talk progress
Among the FTSE gainers, miners are holding the top three spots following a Bloomberg report saying that the Trump administration in getting ready to offer a partial trade deal to China. With China being by far the biggest buyer of metals even a partial resolution to the Sino-US tensions would boost expectations of forward demand for metals.
Other media reports indicate also that the US is about to change its stance on Huawei and will start issuing licenses to some US companies allowing them to deal again with China’s technology giant. How this will combine with restrictions mulled by the US only two days ago on 25 Chinese technology firms believed to be involved in human rights abuses in China’s Xinjiang province remains to be seen, but the carrot and the stick seem to indicate that the US is eager to come to some sort of resolution in the protracted trade negotiations.
Asia stocks perked up overnight on news of a potential trade talk breakthrough but European markets were more reserved, with the FTSE and the DAX both trading a touch lower but French stocks bouncing up 0.20%.
The pound has regained some bounce in its step ahead of a meeting between Boris Johnson and his Irish counterpart in an attempt to fine-tune the Brexit proposal into something that would be workable for both countries and acceptable for the EU.
Sterling is trading up 0.3% against the dollar but is nearly flat against the euro.