Disappointing construction update dumps Ftse into the red

The London market was dragged into the red after a gloomy economic update from Britain’s construction industry dealt a punishing blow to housebuilders.

Disappointing construction update dumps Ftse into the red

The Ftse 100 was 55.6 points lower at 6,522.3 after Charles Church owner Persimmon plummeted more than 6% following the update, which revealed the construction sector experienced its worst month for seven years during the run-up to the Brexit vote.

The closely watched Markit/CIPS construction purchasing managers’ index recorded a worse-than-expected 46.0 in June, down from 51.2 in May and well below economist expectations of 50.6.

A reading above 50 indicates growth, while anything below is considered contraction.

The British Land Company was the biggest faller, off 7% or 43.5p to 565p, while Barratt Developments slipped 6% or 26.7p to 388.3p.

Across Europe, Germany’s Dax was 0.7% lower and the Cac 40 in France edged down 0.9%.

Mining and precious metal stocks were leading the charge on London’s top-flight index, with silver miner Fresnillo up 135p to 1895p and Glencore climbing 6.8p to 162.8p.

Supermarket giant Sainsbury’s was off 5.2p to 230.9p after announcing it would end a joint venture with budget supermarket Netto, which would result in the closure of 16 stores and put 400 jobs at risk.

The London Stock Exchange also helped lead the market lower after shareholders voted overwhelmingly to approve a proposed £21bn merger with Germany’s Deutsche Borse, despite Britain voting to leave the EU. Shares were down 30p to 2493p.

The biggest risers on the Ftse were Fresnillo up 135p to 1895p, Randgold Resources up 385p to 9160p, Glencore up 6.8p to 162.8p, and Antofagasta up 11p to 480.6p.

The biggest fallers were British Land Company, Persimmon, Barratt Developments, , and Berkeley Group down 169p to 2485p.

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