Weak trading statements from two major building material suppliers have shaken the foundations of a host of housebuilding related stocks and raised questions about the wider housing trend.
Travis Perkins (TPK) and SIG (SHI) were the two companies arguably responsible for awakening investor fears about the health of sectors intrinsically linked to the housing market thanks to pessimistic trading updates. This in turn knocked the likes of other DIY specialists Wolseley (WOS), Kingfisher (KGF) and Grafton (ie:GN5).
The downturn in trading at Travis Perkins, a bellwether for domestic housing transaction, was less devastating than some of its peers, but like-for-like sales growth of 2.6 per cent didn't look so impressive against the 5.7 per cent average achieved in the previous two quarters. Markets also balked at earnings growth expectations being at the lower end of forecasts.