HBOS, Royal Bank of Scotland and Alliance & Leicester led the decliners in London on Thursday, as yet more fresh gloom about the UK housing market contributed to a 48.45-point, 0.8% fall in the blue chip FTSE 100 index.
The fall came after an earlier rally sparked by unexpectedly strong May retail spending figures from the Office for National Statistics.
The index closed at 5,708.4, while the FTSE 250 was down 88.16 points or 0.9% to 9,446.6.
The day’s gainers were led by miners Anglo American and Eurasian Natural Resources, up 3.5% and 3.4% respectively; ICAP, Next and Centrica also rose.
Market observers attributed the latest bout of housing market scepticism to comments from HBOS, Britain’s biggest mortgage lender, which this morning announced some housing industry-related write-downs and predicted house prices may tumble as much as 9% this year.
However, it also said trading to the end of May had been “satisfactory” and in line with forecasts.
Investors nevertheless responded by letting go of HBOS shares, which slid 22p or 7% to 296.75p, and also gave back RBoS and A&L stock, down 5% and 4.8% respectively.
Thompson Reuters and Persimmon also numbered among the day’s five biggest losers.
Meanwhile, any celebrations over the news that retail sales leapt 3.5% last month were tempered by concerns that such unexpected strength could be seen as boosting the case for an interest rate rise.
As London was closing, the New York exchanges were relatively flat, with the Dow Jones Industrial average down about 3 points at 12,025.55 and the S&P 500 down less than a point at 1,337.23.
The big news on Wall Street at lunchtime was a report that two former Bear Stearns hedge fund managers had surrendered to the FBI and were expected to be charged with securities fraud.ifaonline
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