Share indices in the week to 15 June 2001
Merrill Lynch has broken ranks with City opinion and taken a rosy view of the prospects for housebuilders.

Schroder Salomon Smith Barney and Peel Hunt issued downbeat notes on the prospects of the housebuilding sector last week. But in a note on Persimmon, Merrill Lynch analyst Mark Hake upgraded his rating to buy, arguing that fears over higher interest rates were unfounded.

Hake believes that the link between housebuilders' performance and interest rates is not as close as it has been in the past, and that the long-term prospects for the sector remain healthy.

Hake said that this was true of the whole sector rather than simply Persimmon. However, he did think that the firm would raise returns in the wake of the acquisition of Beazer earlier this year.

The note did the housebuilder no harm: its share price rose 28.5p to 310.5p.

Other stocks looked slightly healthier this week, too. Berkeley was particularly frisky, jumping 42.5p to 730p, while Bovis Homes, Crest Nicholson and Redrow all saw improvements.

Materials stocks also experienced a lift this week with aggregate industries, BPB and wolseley all making gains.