Morning:
6°c
Tuesday December 30 update
House prices continued falling last month, piling on the gloom for the big UK builders. The value of the average home fell 1.9% to £161,883, stretching the annual rate of loss to 12.2%.
Property sales slumped to 48,599 from 115,697 a year earlier. The news left Persimmon 5¾p lower at 230¾p, Bovis Homes off 18½p at 376p and Berkeley 9p cheaper at 885½p.
Improved demand for raw materials and a positive final trading session of 2008 in Tokyo propelled share prices toward a year-end flourish that may go a small way to reducing the heavy losses suffered by investors this year.
Rising tension in the Middle East has focused attention back on the oil price, which was a touch softer today, and generated fresh demand for the big oil companies. BG Group jumped 36p to 970½p, BP added 6¼p at 520½p and Tullow Oil put on 5½p at 652p.
An expected resurgence in demand for raw materials also brought in the buyers for the big mining companies. In thin trading, Eurasian Natural Resources rose 10¼p to 333½p, and BHP Billiton added 34p at 1277p.
Their heavyweight listing combined to help drive the FTSE 100 index 50.8 higher to 4370.2 on the last full day of trading in London.
There was little let-up in the selling pressure for retailers as the sales season moved into full swing. Next fell 18p to 1081p, Ted Baker dropped 5p to 335p and Kesa Electricals was down 2½p at 86¼p.
HBOS dipped 2.8p to 67.8p on the back of reports claiming the bank's pension scheme trustees may decide to block the proposed merger with Lloyds TSB, off 4p at 124p, until it receives guarantees that the fund will be backed by the enlarged group.
The shotgun merger has its fair share of critics among Lloyds TSB shareholders. They are far from sure of the benefits expected to accrue from the deal, and have already lost their dividend payments following pressure from the Government.
Bargain-hunters continued to support subprime lender Cattles, up 2¼p at 16¾p. the shares have slumped from around 50p since the start of the month. Only last week, Merrill Lynch slashed its target from 135p to 50p, worried by the group's banking-licence application.
Imperial Energy jumped 140p to 1170p with the deadline for ONGC's £1.3 billion bid expiring this afternoon. ONGC offered 1250p a share in August when the oil was almost $140 a barrel. It has since slumped to below $40, but efforts by the Indian company to wriggle out of the deal or renegotiate the terms have failed. ONGC demands 90% acceptances, or it will walk away. Several big institutional investors are expected to commit to the deal.
On AIM, shares of Bella Media were suspended at 0.35p pending an announcement. The company, which made large-format cameras, this month announced a change of strategy, and is now classified as an investment company. Also on AIM, shares of Bakery Services were suspended at 0.025p pending an announcement.
