Britain's blue chip share index ended down 0.7 percent on Tuesday, hurt by banks after a major shareholder sold its holding in Barclays, although improving US pending home sales lent some support to the market. The FTSE 100 closed 29.17 points lower at 4,477.02, giving up some of the previous session's 2 percent rise.
The UK benchmark is up 1 percent this year and has surged 29.4 percent from a six-year trough hit on March 9. Barclays topped the FTSE 100 losers' list, down 13.5 percent after the Abu Dhabi government-owned International Petroleum Investment Company sold a more than 11 percent stake in the UK bank, raising fears more 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 percent to 5.2 percent. "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. "As far as the FTSE 100 is concerned, we just cannot break out of the 4,500 level with any kind of conviction," he said.
"The Barclays news today has scuffled its chances (to head above 4,500)." Pharmaceuticals, conversely, were another drag on the index as investors rotated out of the sector. AstraZeneca fell 2.5 percent and GlaxoSmithKline slipped 1.1 percent. WPP Group sank 5.4 percent.
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 percent in the first four months of the year, compared with a 5.8 percent fall in the first quarter. Pending sales of previously owned US homes in April unexpectedly saw their biggest monthly gain in 7-1/2 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 1.5 percent to 3 percent. 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 percent. Europe's biggest home improvements retailer, Kingfisher, rose 3.8 percent to top the blue chip gainers after its forecast beating results. Peer Home Retail got a boost from the results, up 2.9 percent, while high street stalwarts Marks & Spencer put on 0.6 percent.
Comments
Comments are closed.