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City stockbroker Panmure Gordon has scoffed at suggestions the housing market may be showing the first green shoots of recovery.
It has told clients that news flow is likely to be weak heading into the summer. "Conditions within the housing market are set to remain very depressed," it warns.
Even so, shares in major housebuilders have enjoyed a strong start to the year, with many of them doubling or even trebling in value on the back of a cyclical rally and some "slightly more upbeat data". But Panmure says they have run too far, too soon and has downgraded the sector from neutral to negative.
Persimmon, down 33p at 358p, has been cut from buy to hold and Redrow, 12½p off at 189½p, from buy to sell, while Barratt Developments, 11p cheaper at 140½p, and Bellway, 32p lower at 723p, have been downgraded from hold to sell. Bovis Homes, 21¼p lighter at 424p, and Taylor Wimpey, 2½p easier at 40¾p, remain on hold.
Investors continued to run scared of the possibility of a swine-flu pandemic. An overnight sell-off on Wall Street was matched by fresh falls in Asia this morning. The FTSE 100 index was left nursing a loss of 89.07 at 4077.94 while the FTSE 250 was down 180 at 7099.8.
A drop of 8%, or 750,000 fewer pints being drunk every day, has been reported by the British Beer and Pub Association on the same period last year, for which the association is blaming the Government's continued policy of raising the duty on beer.
It warns that with more than 30 pubs a week closing their doors, the situation is reaching crisis point.
This is not what the big pub-chain operators want to hear. Many are already weighed down by huge debts which have been made heavier by plunging share prices.
The smoking ban and increased competition from supermarkets selling cheap booze has only made their situation worse.
Fuller Smith & Turner shed 15p at 462p and JDWetherspoon 22¾p at 390¼p, while Greene King was 12p off at 558p, Mitchells & Butlers 10p at 257¼p and Punch Taverns 5¾p at 83¼p.
Property developer Liberty International, down 23¼p at 410p, plans to raise between £500 million and £600 million. JPMorgan warns the issue will require heavy discounting in order to get it away. It is forecasting an issue price of 267p.
Mining shares led the market lower following a softening of raw material prices overnight. Xstrata lost 55p at 545p, Anglo American 101p at 1320p and Kazakhmys 35¼p at 469¼p.
The UK's High Street lenders were laid low by another bout of nervous selling after reports that two of America's biggest banks - Bank of America and Citigroup - had failed the early stages of the Federal Reserve's crucial stress test. Both banks may now have to turn to shareholders for billions more dollars, raising fears about the viability of the US banking system.
Lloyds Banking Group slipped 3.4p to 97.1p, state-controlled Royal Bank of Scotland shed 1.3p to 33p, Barclays fell 9½p to 224¾p and HSBC was left nursing an 18½p loss at 448p.
Mears shrugged off recent weakness in the shares to post a rise of 6¼p at 236p. Bob Holt, chairman and chief executive of the social housing and care homes operator, says the group has performed strongly with the order book currently running at £1.6 billion.
The company's joint broker Investec Securities continues to rate the shares a buy and says: "The defensive nature of the majority of Mears' markets, coupled with outsourcing opportunities, provides significant share price potential".
Indago Petroleum stood out with a rise of 3¼p to 35½p. It is to wind up the company and return up to $35 million (£23.8 million) to shareholders following the sale of its remaining exploration licences in Oman.
Heavy turnover in Beowulf Mining saw more than six million shares change hands as the price climbed 1.12p to 2.37p. The Swedish-based miner has confirmed it is possible to extract iron, titanium and vanadium from the Ruoutevare deposit.
