FTSE 100 dragged down by decline from housebuilders

The FTSE 100 closed in the red after it was dragged down by declines among housebuilders and commodity stocks.

The London index fell back, dropping 37.62p to 7,434.13p, as tumbles in value by Sainsbury’s and Barclays also weighed it down

City Index senior market analyst Fiona Cincotta said: “A warning on margins from Taylor Wimpey and news that the Sainsbury-Asda merger was off saw the FTSE fall sharply on the open.”

Sentiment was also weak in the eurozone after carmakers and financial services companies on the continent fell in value, added David Madden, market analyst at CMC Markets UK.

The DAX fell 0.25% and CAC was down 0.33%.

Sainsbury’s slid to its lowest share price in 16 years after its £12 billion merger with Asda was blocked by the competition watchdog.

In its final report into the deal, the Competition and Markets Authority (CMA) found that it would lead to increased prices in stores, online and at petrol stations across the UK. It closed down 10.6p at 216p

There was a slump across the blue-chip housebuilders after FTSE 100 listed developer Taylor Wimpey warned that it was costing more to build homes.

Taylor Wimpey shares sank after it said profit margins for the full year would be lower than expected after a rise in building costs over the first quarter. It closed down 10.3p at 181.9p.

Industry peers Persimmon, Barratt and Berkeley were also impacted by the cost increase warning, falling in value during the day’s trading.

Barclays shares slipped after it disclosed a 10% drop in first quarter profits and warned it may need to slash costs further during the year.

The lender reported underlying pre-tax profits of £1.5 billion for the first three months of 2019, down from £1.7 billion a year ago, after suffering a tough quarter for investment banking. It finished 6p lower at 160.4p.

RBS saw shares decline after boss Ross McEwan announced his resignation from the helm of the taxpayer-owned bank.

The news came ahead of the bank’s AGM, where bosses warned that the lender could face a Brexit hit as uncertainty weighs on the economy. It closed down 6.7p at 250p

Elsewhere in company news, troubled retailer Carpetright surged in value after it said its performance improved significantly in the fourth quarter as it looks to bounce back following a torrid 12 months.

The firm said its performance in the 12 weeks to April 20 was in line with expectations, with like-for-like sales showing a big upswing compared with the year to date figure. It rose 12.7p to 28p.

In light of the deferral of Brexit, the pound has continued to remain fairly steady. It was 0.01% up against the dollar and 0.14% up against the euro.

The price of Brent crude rose 0.56% to 74.94 US dollars.

The biggest risers on the FTSE 100 were DS Smith, up 5.6p at 365.4p, Reckitt Benckiser, up 79p at 6,120p, United Utilities, up 9.6p at 847p, and London Stock Exchange Group, up 55p at 5,040p.

The biggest fallers on the FTSE 100 were Taylor Wimpey, down 10.3p at 181.9p, Legal & General, down 14.3p at 275.2p, Sainsbury’s, down 10.6p at 216p, and Glencore, down 12.6p at 321.4p.

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