Rising rates hit share prices on FTSE

Rising interest rates claimed a major casualty today after car dealership Pendragon warned its profits would be hit by a consumer spending slowdown.

The alert from the company – best known for the brands Evans Halshaw and Stratstone – caused its shares to tumble almost 18% in the FTSE 250 Index.

Pendragon’s plight was in contrast to some of the UK’s biggest housebuilders after blue-chip stock Persimmon said it was performing well in the face of higher borrowing costs. With oil stocks also doing well, the FTSE 100 Index limited losses to 12.2 points at mid-morning, at 6555.2.

Barratt Developments benefited from the upbeat statement from Persimmon, with shares reaching the top of the risers board after a gain of 10p to 1015p.

Persimmon initially made gains but was later 3p lower at 1200p.

BP took Persimmon’s place near the top of the risers board, as investors continued to digested Friday’s agreement to invest £3bn in Russia in conjunction with state-owned Gazprom. Shares were 5p higher at 588.5p.

Other firms in positive territory included Enterprise Inns, lifted by an upgrade from Citigroup anticipating big returns if the company converts to tax-efficient REIT status.

Enterprise moved 4p ahead at 678p following the note, although sector peer Punch Taverns – another potential REIT – was off 11p at 1266p.

Dulux paint maker ICI, meanwhile, was lifted 4p higher to 628.5p by weekend reports of a higher bid for the chemicals company from Dutch suitor Akzo Nobel.

Heavily-weighted mining stocks accounted for the top five Footsie fallers as the market struggled to make headway.

Anglo American led the decline, down more than 2%, or 62p, at 2976p. Antofagasta was off 9.5p at 609p and Kazakhmys down 24p at 1258p.

In the FTSE 250 Index, London Stock Exchange shares were down 10p at 1345p, reflecting the payment of shares in its takeover of Borsa Italiana.