(Bloomberg) -- A selloff in UK homebuilders deepened on Monday following a downbeat update from Crest Nicholson Holdings Plc, pushing a key technical indicator into oversold territory.
A FTSE index tracking the builders’ shares fell as much as 3.5% in early trading, taking its relative strength index below 30 — a level that signals to some analysts and investors that a stock or index may have fallen too far, too fast.
The homebuilder benchmark is falling for a seventh straight session, extending its drop since the start of last year to more than 40% after a surge in interest rates and a weakening British economy spurred worries about the mortgage market. The index also reached oversold levels about a month ago before rallying on hopes that the end of Bank of England rate hikes may be in sight.
On Monday, Surrey, England-based builder Crest Nicholson said transaction levels had declined further, particularly in recent weeks. Rightmove Plc, meanwhile, said UK property sellers had cut asking prices this month at the sharpest pace since December.
Crest Nicholson shares were down 5.7%% as of 11:20 a.m. after briefly falling as much as 15%. Rivals Taylor Wimpey Plc and Persimmon Plc were down 2.8% and 2.4%, respectively, while Rightmove fell 1.3%.
--With assistance from Paul Jarvis.
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