By Steve Goldstein
U.K. home builders were mixed on Thursday as UBS downgraded two and chopped six price targets, citing rising taxes and less upside after a good run.
Crest Nicholson /zigman2/quotes/207992108/delayed UK:CRST -0.34% shares fell 5% as UBS cut its rating to sell from neutral, and Persimmon fell 1% on a downgrade to neutral from buy. Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW +1.17% and Vistry Group /zigman2/quotes/208587963/delayed UK:VTY -0.62% each rose 1%.
Analyst Greg Kuglitsch said the sector now trades on 1.6 times tangible net asset value, below the peak of 2 but above the long-term average of 1.2. While the market remains undersupplied, higher corporate taxes and an expected 3% tax rate to finance re-cladding is a concern, he said.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.42% was lower by 0.3% in afternoon trade, after the Bank of England gave no indication that it was anywhere near removing stimulus. In a unanimous decision to keep rates at 0.1% and its bond-buying program unchanged, the central bank said there would be no tightening “until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.3819% drifted lower after the decision.
It also was the first opportunity for traders in the U.K. to react to the Federal Reserve decision, in which the central bank said it wouldn’t raise interest rates through 2023. The yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.31% spiked higher on Thursday, as traders assessed the implications of the decision as well as Chair Jerome Powell’s relaxed attitude toward the bond market selloff.
Ocado Group /zigman2/quotes/207225647/delayed UK:OCDO +0.03% shares fell 5%. The food delivery service reported 40% revenue growth in its U.K. venture with retailer Marks & Spencer /zigman2/quotes/206225481/delayed UK:MKS +0.51% for the quarter ending Feb. 28, but said sales and Ebitda (earnings before interest, taxes, depreciation and amortization) growth will slow due to tougher comparisons.
Fevertree Drinks /zigman2/quotes/205978440/delayed UK:FEVR +1.42% shares slumped 10%, as the fast-growing tonic-water maker issued margin guidance that was sharply below expectations.