Blue chips subdued on bumper day for builders

London

THE FTSE 100 closed lower after the strengthening pound pressed on the index following a bright morning driven by good performances from housebuilders.

London’s top flight closed 38.78 points lower at 7,571.92 at the end of trading yesterday.

It was a largely subdued trading session for blue-chip firms with exception to construction firms, as Berkeley’s plans for a £1 billion shareholder payout were welcomed by investors.

The UK housebuilder said it will pay out £500 million to shareholders in March this year and another £500m a year later. Berkeley led the FTSE 100 at the close of play after its shares jumped 226p to 5,412p as a result.

The announcement helped to boost its, with Taylor Wimpey closing 2.1p higher at 216.4p, and Persimmon closing 24p higher at 3,001p.

Uk-oriented housebuilders were also optimistic over the stronger pound, which rose in value after the Confederation for British Industry’s latest manufacturing report highlighted rapidly improving business confidence.

The value of the pound increased 0.64% versus the US dollar at 1.313 and rose 0.63% against the euro at 1.184.

European markets were largely subdued, with the Dax continuing to tease around an all-time high for the index.

The German Dax increased by 0.05% while the French Cac moved 0.58% lower.

The Dow Jones opened higher, returning to growth despite Treasury Secretary Steve Mnuchin’s comments there is no hard deadline for the US and China to complete phase two trade talks.

In company news, Sainsbury’s dipped lower after chief executive Mike Coupe announced plans to step down after six years. Sainsbury’s said he intends to leave the company at the end of May, with retail operations director Simon Roberts taking over. Shares in the company fell 4.4p to 208p at the close of play.

Elsewhere, Ted Baker’s torrid spell continued, as shares sank further after revealing a recent accounting blunder was almost three times as bad as first thought. It closed 21.2p lower at 297.8p.

Shares in The Works jumped after chairman Dean Hoyle purchased £586,000 worth of shares in the high street retailer. It closed 2.9p higher at 47.5p.

The price of oil dropped on the back of fears that current supply could be excessive. The price of a barrel of Brent crude oil fell 0.55% to 65.36 US dollars.

The biggest risers on the FTSE 100 were Berkeley, up 226p at 5,412p, Sage Group,

up 28.6p at 762.6p, London Stock Exchange Group, up 278p at 7,986p, and Aveva, up 140p at 5,170p.

The biggest fallers were Tui,

down 49p at 837p, NMC Health, down 80p at 1,407p, Burberry, down 113p at 2,150p, and Antofagasta,

down 43p at 907p.

New York

TECHNOLOGY shares led the S&P 500 marginally higher on yesterday, as a healthy forecast from IBM helped mitigate worries over the developing coronavirus outbreak.

The S&P 500 and the Nasdaq closed barely in the black after approaching, then backing down from, record highs the day after virus fears prompted a sell-off. The Dow closed nominally lower.

Chipmakers rose following a strong forecast from Dutch semiconductor equipment maker ASML Holding NV.

The Philadelphia SE

Semiconductor index gained 0.8%.

Streaming pioneer

Netflix acknowledged stiffer competition in the United States, where quarterly growth fell short of analyst estimates. Its shares closed down 3.6%.

Shares of Boeing extended their fall, dropping 1.4% in the wake of the planemaker’s announcement that it does not expect approval for its 737 MAX aircraft to return to service until summer.

Tesla continued its rally, rising 4.1% .

On the economic front, sales of existing homes in December blew past economist estimates to reach a near two-year high.