Rightmove is one of the stocks that have suffered as a result of bearish brokers squeezing in. Investors reacted negatively to JP Morgan’s concern about the profitability of the group if they need to defend their dominance on the market.
In October, CoStar, an American property company , swooped down on OnTheMarket, a smaller competitor.
Rightmove shares recovered from the fallout caused by the acquisition, partly due to better than expected property market dynamics. However, analysts at the Bank believe that “the consensus view of the rather limited impact of the new challenger” may be understated, given CoStar’s ambitious advertising efforts and the potential financial impact Rightmove could suffer as it defends its position.
JP Morgan issued an “underweight”, or “sell”, recommendation, which pushed the shares down by 22p or 3.9 percent to 542 3/4p.
The decline contributed to the FTSE 100’s 36.57 point, or 0.5 percent, decline, which finished at a low of 7,558.34. Investor sentiment worsened due to hawkish comments from European policymakers, which dampened expectations for imminent interest rate cuts.
Gold miners Fresnillo also fell in price, falling 24 1/2p or 4.6 percent to 502 3/4p due to the strong dollar. Barclays also dropped, dropping 3 1/2p or 2.5 percent to 1411/2p. Investors were unnerved after reading the Wall Street results from Goldman Sachs, Morgan Stanley, etc.
AstraZeneca, the pharmaceutical giant lost 206p or 1.9 percent to £106.46. Investors sold the stock on the advice of UBS.
UBS is worried about the drug company’s risk from Medicare Reforms in the United States, which could decrease sales growth.
Moneysupermarket.com, a tier lower, was downgraded by two brokers. Jefferies argued there were few catalysts to help the stock gain momentum in the short-term. Analysts at Investec said it was better to wait for clarity about the core revenue drivers to be clear before investing again. Both banks lowered their ratings to “hold”, which sent shares of the price comparison website to a 3-month low. Shares fell 18 3/4p or 7 percent to 249 3/4p. The price comparison website was the largest drag on the FTSE 250 which fell 7.52 points, to 19,193.32.
Spirent Communications shares jumped 12.25p or 10.6 percent to 128.25p, the highest price since October 1. The bosses are looking ahead and say that the telecoms tester is well positioned to make strategic and operational improvements.
The credit checker’s shares closed up 74p or 2.4 percent at £32, a less impressive but still impressive trading update.
Qinetiq also announced plans to buy back £100 million worth of shares after reporting strong trading in the third quarter. This plan won over investors and helped boost the FTSE 250 Defence Group by 14 1/4p or 4.5 percent, to 3321/2p.
In terms of broker recommendations, Harbour Energy soared as analysts at Bank of America claimed that the $11.2 billion acquisition of Germany’s Wintershall Dea by Bank of America could lead to a “major rating opportunity”. The company’s shares rose 18 1/2p or 6.2% to 315p.
Gamma Communications closed the day at £11.76, up 68p or 6.1%. This increase was due to the Telecoms Group confirming its profit guidance for the full year.
Hostmore however bounced back from seven-month highs and settled at 22 1/2p. The company that owns the Fridays chain of restaurants reported no growth in sales for the second half after losing 1 1/2p or 5.9 percent.