Housebuilders ahead but FTSE down overall

Halifax figures revealing a sixth successive month of rising property prices saw housebuilders leap ahead today as the Bank of England’s move to keep interest rates at a record low also helped the sector.

Charles Church owner Persimmon lifted 7%, with similarly big hikes for its fellow FTSE 250 firms Taylor Wimpey and Barratt Developments thanks to news of another 1% house price rise in December.

Supermarket Sainsbury’s was also making gains after a well-received Christmas trading update, but the wider FTSE 100 Index slipped 3.3 points to 5526.7.

Investors on both sides of the Atlantic appeared unimpressed by US jobless figures, which signalled layoffs were easing and that the US economy could be on the verge of posting the first monthly gain in jobs in two years.

The number of Americans claiming unemployment benefits barely rose last week, but the Dow Jones Industrial Average was down around six points in early trade.

There was also little reaction in the UK to the Bank’s latest decision to hold rates at 0.5% and leave its £200bn (€222bn) Quantitative Easing programme unchanged.

However, the pound lost ground to the US dollar amid ongoing concerns over the Government’s ballooning deficit and the looming general election, with sterling dropping 0.6% to $1.59.

There were mixed fortunes in the retail sector after Sainsbury’s surged in the wake of strong figures but Marks & Spencer and Next continued to struggle after updates this week fuelled worries about 2010 prospects.

M&S was down 6.4p at 371p and Next slipped another 42p to 2059p.

The supermarket sector fared better after Sainsbury’s delivered third quarter trading figures at the top end of expectations.

Shares were more than 3% higher – up 10.2p to 328.2p – as the company reported a 4.2% rise in like-for-like sales amid record Christmas trading.

Among fallers, National Grid eased 15p to 652.5p as the power firm issued its second gas balancing alert after the UK’s freezing weather pushed demand to record levels.

A National Grid spokeswoman said technical problems had also led to a 52 million cubic metres shortfall in supplies from the Langeled pipeline, which pumps in gas from Norway.

Outside the top flight, housebuilder Persimmon surged 31p to 500p after the Halifax news.

In a trading update, Persimmon added that forward sales at the start of 2010 were up 40% on a year earlier, while the company also reported a better second half of 2009.

Barratt Developments joined in the rises, gaining 6.4p to 138.4p, while Taylor Wimpey added 1.92p to 41.51p.

Elsewhere, transport firms were lower after the Office of Fair Trading’s referred the bus sector to the Competition Commission after its inquiry found that firms resort to savage tactics to ward off new entrants on local routes.

Go-Ahead dropped 24p to 1325p and National Express eased 2.3p to 194p.

The biggest Footsie risers were Lloyds Banking Group ahead 2.34p at 56.93p, Wolseley up 49p at 1410p, Sainsbury up 10.2p at 328.2p and Barclays up 8.5p at 315.5p.

The biggest Footsie fallers were Prudential down 17p at 628.5p, Vodafone off 3.7p at 138.8p, Standard Life down 5.5p at 210.5p and National Grid down 15p at 652.5p.