Financials are still enjoying some follow on buying, but gains have been trimmed from earlier in the day. The main culprit for today’s fall in the FTSE, for once isn’t the banks, but the energy sector. BP and Shell make up a sizeable chunk of the UK’s benchmark index, so with crude down around 5% on the day, it is always going to be difficult for the FTSE to make traction.
After the excitement over yesterday’s new home sales coming in at better than expected, the US housing slump is still showing of signs of abating. Sales of homes may have increased more than expected by volume, but prices are continuing to plumb new depths. The 10 and 20 city indices are down over 25% from their peak and over 18% on last year. House prices are now back to 2004 levels with further to go if the current trend line is anything to go by.
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