After a horrendous start to 2008 for housebuilders, which saw more than 10% of their value wiped out in three days, things could only get better.

And sure enough by Monday this week the sector had recouped two-thirds of its loss. Persimmon led the fightback and by Tuesday was 13% up on the week. Meanwhile Bovis Homres rose 12% and Redrow had jumped 6%. Even Taylor Wimpey was edging north on Tuesday, hours after announcing a 20% drop in UK orders.

Kevin Cammack, an analyst at Kaupthing, said companies are playing a game of wait-and-see until the key house buying period of the spring.

The construction market was swept along by the same negative sentiment.

Despite robust figures from Balfour Beatty on Monday its shares had still slipped 5% on the week by Tuesday. It didn’t stop Dresdner Kleinwort raising profit estimates for 2008 and 2009 by between 4% and 5%, though, citing its “relative immunity to consumer and public spending concerns”.