The FTSE 100 traced some of its woes to the latest house price data on Tuesday as the index gave back most of the gains it had made a day earlier.
Halifax’s house price index showed another slowdown in the rate at which prices are rising across the UK.
The 7.1% rise in the year to August, although healthy, represented a five-month low.
Halifax’s data fed through to the stock market, where the price of housebuilders’ shares fell significantly.
Berkeley Group was bottom of the FTSE 100 with a 3% drop by the end of the day and was joined in the bottom 10 performers by Persimmon.
Their performance helped push down the index by 0.5%, a loss of 37.81 points. It ended the day at 7,149.37.
The drop put the index a little ahead of Germany’s Dax, down 0.6%, and slightly worse than the 0.3% drop in Paris.
Meanwhile in the US traders returned to their desks after the long weekend.
The S&P 500 had dipped 0.4% when European markets closed. The Dow Jones was down 0.7% at the same time.
“Investors may have come back refreshed from the Labour Day holiday, but US markets haven’t carried the cheer past the door,” said AJ Bell financial analyst Danni Hewson.
It came “despite a nifty bounce from the Nasdaq, which delivered a record intraday high before plunging into the malaise affecting both the Dow and the S&P”, Ms Hewson said.
“Covid vaccine maker Moderna was one of the Nasdaq’s biggest risers in early (trading), though it fell back slightly on the news that there could be a delay in its booster shots being signed off.
“But even if approval is delayed beyond the initial US rollout, the delay isn’t expected to be lengthy and ultimately the business expects the US plan to further swell its coffers.”
The cost of Brent crude oil dipped 0.5% to 71.80 dollars per barrel, while sterling rose slightly. By the end of the day one pound could buy 1.379 dollars or 1.1638 euros.
On Tuesday one of the potential bidders for FTSE 250-listed Meggitt pulled out of the multibillion-pound takeover battle for the company.
TransDigm’s decision helped send Meggitt’s shares down more than 12%, placing it firmly at the bottom of the index.
It had not made a firm offer for Meggitt, but had indicated it could offer £7 billion for the defence company.
Meggitt continued to recommend a separate deal, with US group Parker Hannifin.
In other acquisition news, online gambler 888 appears to be the front-runner to take over William Hill’s non-US operations. It confirmed “advanced discussions” with the company’s owner. Shares rose 1.8%.
Housebuilder Vistry saw its shares rise by 3.2% after increasing its profit outlook for the year to £345 million, compared with earlier expectations of £310 million.
The biggest risers on the FTSE 100 were DS Smith, up 12.6p to 462.3p, Whitbread, up 76p to 3,260p, Reckitt, up 124p to 5,844p, Flutter Entertainment, up 180p to 14,780p, and Rightmove, up 8.8p to 740.4p.
The biggest fallers on the FTSE 100 were Berkeley Group, down 142p to 4,658p, United Utilities, down 52p to 1,965p, Weir Group, down 43.5p to 1,723p, Legal & General, down 6.8p to 276.6p, and Smiths Group, down 32.5p to 1,422.5p.