Monday, 18 August - 4pm update

Talk that housebuilding shares had been oversold was resoundingly dismissed today, after Rightmove added to the misery engulfing the property sector.

The website reported that prices had posted the biggest annual drop in at least six years this month, sending building stocks plunging yet again.
Bellwether of the sector Persimmon was the hardest hit, diving 23¾p to 328p, and making it the biggest faller on the second tier. Rival Bovis sank 26¾p to 425p and Bellway fell 28½p to 545p.

The housing market may be in dire straits, but the threat of increased competition did for Rightmove's shares. The residential property sales website was hit by an announcement from the estate agents' trade body that it was planning to create a free rival.

The National Association of Estate Agents will launch Property Live in October, a website allowing estate agents to list their flats and houses without paying a subscription fee, in a move which should help the beleaguered industry but spells trouble for Rightmove, which charges a monthly rate to advertise on its site.

Its shares, which were changing hands at more than 600p less than a year ago, plummeted by over 8% on opening, before recovering slightly to trade down 14¼p at 305¼p.

Trading volumes again proved thin, allowing the blue-chip index to stage a rapid 70-points turnaround before losing most of the gains after Wall Street opened lower. Even the top-traded stock Vodafone, up 0.05p to 139.7p, which on a normal day sees 100 million shares change hands had fewer than 45 million traded by late afternoon. London's benchmark index rose just 1.6 to 5456.4 while the Dow sank 31.1 to 11,628.8.

Retailers had a miserable day, reversing Friday's gains, but a rumour that a bid could finally be coming for Debenhams provided a rare reason for cheer. Spanish fund manager Bestinver Gestion topped up its stake to 12%, starting talk that the struggling High Street chain could finally be taken over.

Its shares were still off 3p at 51p, while Home Retail Group was 13p cheaper at 242¾p and Marks & Spencer was down 6½p at 269½p.

But there was better news for commodity stocks. Record profits from Anglo-Aussie giant BHP Billiton, continued talk of further consolidation and a rally in the price of gold buoyed the miners, with BHP rising 45p to 1576p, Anglo American soaring 103p to 2839p and Vedanta Resources putting on 36p to 1758p.

Oil stocks were another of the day's big beneficiaries, as the price of crude climbed amid fears over the impact of a storm on facilities in the Gulf of Mexico. Explorer Tullow Oil raced to the top of the Footsie leaderboard, surging 30½p to 706½p, Royal Dutch Shell's A shares were 41p dearer at 1838p and energy services company Wood Group rose 6½p to 401½p. But the oil price rise weighed on gas-guzzling companies, with British Airways sliding 8¾p to 252¼p and cruise operator Carnival down 60p to 1925p.

The long-suffering banking sector received a rare spot of good news as Royal Bank of Scotland found a friend. Citigroup raised its target from 250p to 270p and reiterated its buy rating, saying the bank has made good progress in boosting its capital ratios and integrating its new businesses. But despite Citi's upbeat stance, speculation that RBS is on the brink of abandoning the sale of its Direct Line and Churchill insurance empire sent its shares plunging 5¾p to 227p.

Newspaper publisher Johnston Press remained out of favour with brokers as Morgan Stanley cut its price target for the shares from 75p to 70p and warned that the advertising market will deteriorate further. The City big-hitter said first-half figures due out at the end of the month are unlikely to give shareholders any cause for cheer. But traders ignored the pessimism and the shares rallied 1½p to 59½p.