By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks remained under some
pressure on Wednesday, even as broader European markets got a lift,
though home-builders and shares of Aviva PLC and Kingfisher PLC
were among the stand-out gainers.
The FTSE 100 index treaded water at 6,360.24.
Decliners outweighed gainers, with Vedanta Resources PLC
tumbling over 6% after Morgan Stanley cut shares to underweight
from equal-weight, saying shares have re-rated strongly since the
start of January 2012 and valuations look "demanding" now.
Chip designer ARM Holdings PLC (ARMHY) was another decliner, off
2.5%.
Downbeat sentiment came as investors fretted over a continued
lack of progress by U.S. politicians in the budget standoff. Stocks
trimmed losses earlier in the day on news that President Barack
Obama will nominate Janet Yellen as the new U.S. Federal Reserve
chairwoman, but U.S. markets were unable to keep a grip on an early
lead.
But home-builders were on the rise after a series of upgrades by
Goldman Sachs. The investment bank said the housing recovery in the
U.K. is underway. "Partly stimulated by the 'Help to Buy' shared
equity scheme, lead indicators such as U.K. mortgage approvals and
RICS Survey data strongly indicate a rebound in activity," said
Goldman analysts.
Persimmon PLC was the top gainer in London, up 5.5% after
Goldman added the home-builder to its conviction buy list, along
with Taylor Wimpey PLC and Rightmove PLC . Away from the main
index, Taylor Wimpey rose over 4% and Rightmove was up 0.3%.
Goldman lifted Bovis Homes Group and Barratt Developments PLC
each to buy from neutral. Also away from the main index, shares of
those companies were up 4%.
Other gainers included Kingfisher PLC , up 1.6%, and Aviva PLC
up 1.3%.
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