Real estate stocks dived in late-afternoon trade on Wednesday, sending the FTSE 250 into the red, after a bigger-than-expected jump in US inflation.
The US consumer price index rose at an annual rate of 3.5% in March, up from 3.2% in February and ahead of the 3.4% expected by the market. Core inflation also surprised to the upside, remaining at 3.8% against forecasts of 3.7%.
The data was “sending traders to the exit”, according to Neil Wilson, chief market analyst at Finalto, with the market now pricing out an interest-rate cut in June. “Treasury yields spiked sharply, and the dollar rallied whilst gold and stocks declined.”
The yield on a 10-year US Treasury was up 13.3 basis points at 4.502% – its highest level this year.
In London, high-yielding, safe-haven stocks like those in the real estate sector bore the brunt of the sell-off, with Urban Logistics Reit, Safestore Holdings, Derwent London, Great Portland Estates, IWG, Empiric Student Property, Tritax Big Box Reit and Grainger all taking up the top spots in the FTSE 250 fallers list.
OSB Group was a high riser of the day, jumping 5% as it continues to recover after a heavy share-price drop last month on the back of an underwhelming set of annual figures.
The group, which trades as OneSavings Bank, has risen 9% since last week when it announced the formal appointment of Victoria Hyde to the board as chief financial officer. Hyde has been the deputy CFO since September 2022 and had spent 21 years at Barclays previously.
Comments from the investment bank at Barclays could also have been providing a lift, which reiterated its ‘overweight’ position on OSB, saying: “We remain positive on UK banks, given expectations of rebounding earnings momentum and cons upside.”
A number of other financial stocks were also performing well, such as North Atlantic Smaller Companies Investment Trust, Ninety One, Lancashire and Close Brothers.
FTSE 250 – Risers
OSB Group (OSB) 389.00p 4.80%
North Atlantic Smaller Companies Inv Trust (NAS) 3,690.00p 2.79%
Ninety One (N91) 176.50p 2.68%
Baltic Classifieds Group (BCG) 233.00p 2.64%
Lancashire Holdings Limited (LRE) 599.00p 2.57%
Trainline (TRN) 365.20p 2.35%
Plus500 Ltd (DI) (PLUS) 1,917.00p 2.29%
Tate & Lyle (TATE) 624.50p 2.29%
Close Brothers Group (CBG) 463.80p 2.16%
AO World (AO.) 107.60p 2.09%
FTSE 250 – Fallers
Urban Logistics Reit (SHED) 108.20p -3.05%
Safestore Holdings (SAFE) 729.00p -2.67%
Derwent London (DLN) 2,032.00p -2.59%
Great Portland Estates (GPE) 370.00p -2.37%
IWG (IWG) 182.70p -2.30%
Empiric Student Property (ESP) 88.80p -2.20%
Tritax Big Box Reit (BBOX) 149.30p -2.16%
Grainger (GRI) 254.50p -2.12%
Endeavour Mining (EDV) 1,714.00p -2.11%
UK Commercial Property Reit Limited (UKCM) 66.50p -2.06%
