Stocks start to rise after post-election dip, while inflation hits four-year high
After taking a dive in the days after last week’s general election, share prices in listed housebuilders have started to recover.
As the country woke up to the prospect of a hung parliament on Friday morning, shares in the likes of Barrett, Bovis, Taylor Wimpey and Persimmon were down by around 3 to 4%.
However shares in these and other housebuilders appeared to have turned a corner, posting moderate but positive gains in early trading today, as Theresa May set about continuing in government, albeit a minority one propped up by Northern Ireland’s Democratic Unionist Party.
Shares in Crest Nicholson were similarly positive – up 3.5p, or 0.7% – this morning, after it reported half-year revenues and operating profits in line with expectations, while Bellway is expected to update the market on its recent trading activities tomorrow.
Investors in listed contractors did not react as adversely to the outcome of last Thursday’s poll, with stocks of the likes of Balfour Beatty, Carillion and Kier remaining steady, despite doubts hovering over a number of major infrastructure projects, which some observers fear may be kicked into the long grass, or shelved entirely.
Meanwhile inflation has risen to a four-year high, registering 2.9% in May. The Consumer Prices Index for the same month last year was 0.3%, weeks before the UK voted to leave the EU.
The subsequent fall in the value of sterling has pushed up prices of imported goods, while wage inflation, currently 2.1%, has not kept pace.