Last week was one of those strange ones when, despite a swath of poor results, share prices surged, or at least performed well.
Cassandra cashes in
It seemed as though the market was getting carried away. The most surprising movements were in the housebuilding sector, where shares rose on the whole despite a raft of bad news.
The reason was not blind faith in the short-term potential of the housing market but the continued takeover chatter in the sector, which actually increases when companies are performing badly.
The biggest gainer was Barratt, which rose 3% to 720p. In itself that is not surprising because the market is not expecting any nasty surprises when the company announces its annual results on 28 September. In a trading update in July Barratt reassured the market by saying that it expected to announce its 13th consecutive year of organic growth.
More surprising was the movement of Wilson Bowden shares, which rose 2.6% to 1160p. That was despite the fact it was one of the most pessimistic-sounding of the housebuilders when it reported its interim results last Thursday, revealing a 13% decrease in pre-tax profit to £98m.
Other negative news for the housing market, including the Bank of England’s decision on Thursday not to make a further interest rate cut, failed to manifest itself in share prices.
Some of the others also fared well, not least retirement home specialist McCarthy & Stone which rose 6.5% to 602p, not on the back of a positive update, but because the update was better than the one issued in July.
Travis Perkins was one of the worst hit, falling 5.6% to 1470p after it revealed that like-for-like sales at its DIY chain Wickes were down 5% in the six months to 30 June. Overall, construction shares remained roughly flat at 3745, and the all-share rose less than 1% to 2691.
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Angela Monaghan is business editor