Fears over Barclays sell-off drag the FTSE 100 down
THE FTSE 100 ended down 0.7 per cent yesterday, hurt by banks after a major shareholder sold its holding in Barclays, although improving US pending home sales lent some support.
The index closed 29.17 points lower at 4,477.02, giving up some of the previous session’s 2 per cent rise.
Barclays topped the FTSE 100 losers’ list, down 13.5 per cent after the Abu Dhabi government-owned International Petroleum Investment Company sold a more than 11 per cent stake in the bank, raising fears that other investors may cash in on a recent rally in bank shares.
Banks shaved the most points off the index. HSBC, Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered were off 0.6 per cent to 5.2 per cent.
“At some stage the market has got to consolidate and pull back. We had a very big run up yesterday,” said David Morrison, market strategist at GFT Global Markets.
Pharmaceuticals, conversely, were another drag on the index as investors rotated out of the sector. AstraZeneca fell 2.5 per cent and GlaxoSmithKline slipped 1.1 per cent.
WPP Group sank 5.4 per cent. The world’s largest advertising group by revenue said the key like-for-like revenue metric, which strips out the impact of acquisitions and currency, fell 6.7 per cent in the first four months of the year.
Pending sales of previously owned US homes in April unexpectedly saw their biggest monthly gain in seven and half years, a report from a trade group showed, buttressing views the US recession was easing.
In the UK, mortgage approvals for house purchase were slightly higher than expected in April, but still at a subdued level that points to further house price falls, official data showed.
Miners were firmer, with Rio Tinto, Xstrata, Fresnillo, Randgold Resources and Lonmin up between 1.5 per cent and 3 per cent.
The chief executive of Rio Tinto’s copper unit, however, said it sees a risk that a strong rally in copper prices may reverse over the next six to nine months.
Oil producers also gained, with Royal Dutch Shell up 0.2 percent and BP rising 1 per cent.
Europe’s biggest home improvements retailer, Kingfisher, rose 3.8 per cent to top the blue-chip gainers after its forecast beating results.
Peer Home Retail got a boost from the results, up 2.9 per cent, while high street stalwart Marks & Spencer put on 0.6 per cent.