London’s leading share index fell nearly 2% into the red today after a flurry of bad retail news and deepening gloom for housebuilders frayed nerves.
Disappointing first quarter figures from Sainsbury’s and Woolworths saw a host of high street operators lose ground, while builders suffered more after a broker warned the industry was set for years of further misery.
A second day of hefty falls on Wall Street darkened the mood in London, and left the FTSE 100 Index down 105 points to 5756.9 by the close.
Persimmon was the leading Footsie faller after Goldman Sachs said the market was only at the start of a deep downturn, which could last up to three years. Shares in the Charles Church owner lost 8%, or 33.5p to 379.5p. Persimmon is due to drop out of the FTSE 100 Index when a top flight reshuffle takes place on Friday.
Prospects for the sector were also impacted by minutes of the last Bank of England meeting on interest rates, which put back further any hopes for a cut as it revealed some policymakers mooted a rise.
In the second tier, Redrow dropped nearly 18%, down 25.5p to 141.5p. Taylor Wimpey fell 5.75p to 68p and Bellway declined by 55p to 473p.
Slowing sales growth at Sainsbury’s left the retailer 4% down, with its 3.4% first quarter like-for-like sales down on the previous quarter and also lagging behind rivals Tesco and Morrisons.
Shares dropped 10.5p to 325.5p, with concerns that the supermarket may not hold its own against discount rivals in the battle to lure in hard-pressed consumers.
Marks & Spencer was also suffering after the retail gloom and a downgrade from Seymour Pierce, sending shares sliding by 18.75p to 341.25p. A raft of retailers were in negative territory as Next dropped 61.5p to 997.5p and B&Q owner Kingfisher fell 5.8p to 116.9p.
Elsewhere, Woolworths shares shed 6% after it revealed a 2.2% fall in high street sales and said margins were under pressure after it sold a greater proportion of electronics goods. With the departure of chief executive Trevor Bish-Jones adding to uncertainty, shares fell 0.51p to 9.27p.
Broadcaster ITV also dipped on fears for its advertising outlook, losing 2.7p to 53.1p. Another loser was British Airways as oil prices remained above the 132 US dollars a barrel mark. Shares in the carrier were off 12.25p at 225.75p.
In a shortened list of risers, pharmaceutical firms AstraZeneca and Smith & Nephew led the way, with the latter helped by an upgrade from broker UBS. Shares in AstraZeneca rose 12p to 2108p and S&N received a 16.5p boost to 595.5p.
The Footsie’s four biggest risers were Smith & Nephew, up 16.5p at 595.5p, GlaxoSmithKline up 22p at 1102p, Compass Group up 3.25p at 367.75p and International Power, which closed up 3.75p to 424.75p.
The four biggest fallers were Persimmon, down 33.5p to 379.5p, London Stock Exchange down 66p at 866p, Next down 61.5p at 997.5p and Tate & Lyle, which ended the day 22.25p down at 402.25p.