The Market Close - Persimmon report vulnerable foundations - Collins Sarri Statham Investments

Today's Closing Update

U.S. shares are lower in morning trading as falling interest rates continue to put pressure on banks, and technology and energy companies also move lower.

European stocks were little changed in lackluster trade today as mixed earnings results, falling bond yields on worries over possible delays to Donald Trump’s tax reform plan and rising geopolitical tensions between Riyadh and Tehran kept investors on tenterhooks.

US President Donald Trump is in China for talks likely to be dominated by tensions over North Korea. His arrival came after a speech to the South Korean parliament in which Mr Trump urged China to further isolate North Korea. The White House sees China as pivotal in reining in the North’s nuclear aims but Beijing says it is doing enough. Chinese President Xi Jinping gave a lavish welcome to Mr Trump in what has been called a “state visit-plus”.

The European Commission has published proposals aimed at reducing vehicles’ carbon dioxide (CO2) emissions by 2030. The move is designed to put further pressure on manufacturers to develop more hybrid and electric cars. The Commission also wants to introduce an incentive scheme to encourage companies to produce more zero and low-emission cars. Under its plan cars and vans will have to emit 15% less CO2 by 2025 compared with 2021 and 30% less by 2030.

Monarch Airlines has lost its High Court battle over “valuable” runway slots it wanted to exchange with other carriers to raise cash for creditors. The airline ceased trading last month and its administrators’ lawyers called the slots its “most valuable asset”. The company which allocates 39 airports’ slots accepted that Monarch would have received some of them if it had not gone into administration. Wizz Air and EasyJet are among airlines who are interested in acquiring them. The slots cover Manchester, Gatwick, Birmingham, Luton and Leeds-Bradford airports.

Sales of new homes have plateaued over the third quarter at Persimmon, the UK’s second largest housebuilder. The UK100 company said total sales rate per site for the third quarter was in line with the same period last year, although the group reported £909m of forward sales reserved beyond 2017, an increase of 10 per cent on the same period last year. Persimmon said consumer confidence remained resilient while mortgage interest rates were attractive, particularly for first-time buyers looking to take advantage of the government’s Help to Buy equity loan scheme. However, site numbers have fallen by 10% from 2016 and the group warned it continued to encounter a “tight market” for both key housebuilding trade skills and some materials.

GlaxoSmithKline reported the departure of its research and development head Patrick Vallance and said that Hal Barron has been appointed chief scientific officer and head of R&D. The UK 100-listed drug company said Vallance intends to step down as president of research and development to become the UK government’s chief scientific adviser and head of the government’s Office for Science. Vallance will leave Glaxo at the end of March 2018 to take up his new role. Glaxo said Barron has also been appointed as executive director. He will assume his new role and join the board on January 1, 2018.

Charges against three former Rolls-Royce employees and two individuals in relation to an alleged bribery scheme have been revealed by US authorities. The documents detail how the former staff allegedly paid kickbacks to others, including a foreign official, to win work on a new gas pipeline. Four of the five people named have pleaded guilty to the charges. Earlier this year, Rolls-Royce paid £671m to settle corruption cases with UK and US authorities.

Oil Prices eased slightly as Chinese crude imports fell to a one-year low, but losses were partly offset by investor caution over rising political tensions in the Middle East.

Gold Prices rose today as the dollar eased on expectations of possible delays in long-awaited U.S. tax reforms but a looming U.S. interest rate increase in December kept a lid on gains.

Market Close

UK 100	7,529.7	+16.6	+0.2%
UK 250	20,300.2	-6.9	-0.0%
GER 30	13,393.1	+13.8	+0.1%
FRA 40	5,470.5	-10.1	-0.2%
U.S. 30	23,534.09	-23.14	-0.1%
U.S. 500	2,588.5	-2.2	-0.1%
OIL (BRENT)	63.35	-0.34	-0.5%
GOLD	1,285.45	+10.15	+0.8%

UK Risers & Fallers

Workspace Group	962.5	+53.5	+5.9%
Intu Properties	213.85	+5.2	+2.5%
CRH	2761	+63	+2.3%
Wizz Air	3011.5	-311	-9.3%
Persimmon	2772	-102	-3.6%
Associated British Foods	3105	-113	-3.5%