FTSE 100 loses ground as home builder shares tumble, oil prices fall
U.K. stocks tumbled on Thursday, as a pullback in commodity and housing shares put the blue-chip benchmark on track for its first loss in six sessions.
The FTSE 100 fell 0.6% to 6,822.53. The index on Wednesday finished up 0.2% at 6,866.42, scoring its highest close since early June 2015, FactSet data showed.
Housing shares were down after the Royal Institution of Chartered Surveyors said Thursday that housing prices in the U.K. in July grew at their slowest pace in three years. Prices in London are expected to decline in the next year, the survey showed.
Shares of home builders Berkeley Group Holdings PLC and Persimmon PLC fell 3%. Counterpart Taylor Wimpey PLC gave up 3.1%, while Barratt Developments PLC gave up 2.7%.
The trend of softening housing prices “looks set to continue as the U.K. struggles with the fallout,” over the U.K.’s vote to leave the European Union, wrote Ana Thacker, market economist at PhillipCapital UK, in a note.
“A weaker currency is likely to fuel demand from abroad, but the domestic market looks set to suffer, which will permeate other crucial areas of the economy,” she added.
Commodity action: Shares of BP PLC and Royal Dutch Shell PLC dropped as crude oil futures lost roughly 1%. Shell was off 1%, and BP was down 0.3%. Oil prices remained lower after the International Energy Agency warned that a “massive” supply overhang is keeping a lid on the market.
Glencore PLC shares shed 0.3% after the miner reduced its outlook for coal and oil production, but it did raise its copper output guidance. The company said second-quarter output was lower after it made cutbacks in copper, coal, zinc, lead and oil operations.
Movers: Dragging at the bottom of the index Thursday was Old Mutual PLC Shares dropped 5.1% after the financial services company posted a decline in first-half operating profit to £708 million. Net profit rose to £284 million pounds.
The pound was buying $1.2973, down from $1.3010 late Thursday.
The yield on the 10-year gilt was off less than 1 basis point at 0.54%.
Source: MarketWatch
