Shares in listed housebuilders and real estate investment trusts (Reits) rallied in early trading following news that house prices had ticked up and inflation had fallen. Great Portland Estates (GPE), Redrow (RDW), British Land (BLND), Derwent London (DLN), and Persimmon (PSN) were all among the biggest risers in the FTSE All Share index this morning with increases of between 7 and 9 per cent.
The increases came as the ONS revealed that inflation had dropped to 7.9 per cent, slowing more than expected, and said that house prices had nudged up by a fraction, 0.03 per cent, from April to May on a non-seasonally adjusted basis. ML
Read more: Housebuilders: private equity's next target
Rio Tinto raises cost expectations
Mining giant Rio Tinto (RIO) missed the June quarter consensus forecast for iron ore production after a train derailment and has raised its full-year cost guidance for the copper division. Iron ore production was 79.1mn tonnes for the quarter, compared to the forecast of 81.8mn tonnes. The higher copper cost - at 180¢ (139p) to 200¢, compared to 160-180¢ - comes from a delay in rebuilding the smelter at the Kennecott mine in the US. Rio chief executive Jakob Stausholm said iron ore was likely to hit the “upper half” of the production guidance for the full year, however, and said the Oyu Tolgoi underground project was ahead of schedule.
Inflation also looked to impact the company’s lithium project in Argentina, Rincon, with the $140mn budget for this year now under review. AH
Read more: Growing pains: mining stocks' big conundrum
Watkin Jones shares crater
Shares in Watkin Jones (WJG) crashed by more than a third after a bearish trading update. The housing developer said more challenging market conditions meant there was a "greater risk" that four forward sales – in which a developer sells an asset before they have completed it – will not complete before the end of its financial year on 30 September.
The company also revealed a £10mn impairment charge on its balance sheet and an additional £30mn to £35mn in post-Grenfell safety costs. As a result, it said profit before interest and tax (PBIT) would not be much higher than the £2mn recorded in its interims. For 2024, it expects a PBIT of between £15mn and £20mn. ML
