Construction sector drags FTSE to first loss for a week

Markets were unmoved by the Chancellor’s spring statement on Wednesday and the FTSE 100 broke a five-day winning streak due to weakness in the construction sector.

Barratt Developments, Taylor Wimpey and Persimmon all languished close to the bottom of London’s top index.

Their weakness is likely in part to be due to the downbeat outlook for the UK economy which was revealed on Wednesday, said CMC Market analyst Michael Hewson.

“European markets have undergone a somewhat choppy session today, starting the day on the front foot, before running out of steam, sliding back into negative territory on some modest profit taking, with the Dax and Cac 40 both falling away from their highest levels in a month,” he said.

“The FTSE 100 has performed slightly better, hitting a one-month high before retreating, but is still holding up slightly better largely due to the outperformance of the energy sector with the gains being led by BP and Shell, on the back of firmer oil prices.”

The two oil companies ended the day at the top of the index. BP’s shares had gained 4.9%, while Shell was up 3.9%.

The price of Brent crude oil rose nearly 5% to 121.21 dollars a barrel.

Other natural resource giants including Glencore, Rio Tinto and Antofagasta also held up well.

It helped the index avoid a severe drop, closing down just 0.2%, or 16.09 points, to 7,460.63.

In Europe the Dax was down 1.4% while the Cac 40 closed 1.3% in the red.

Across the Atlantic shares were also struggling. The S&P 500 had lost 0.5% shortly before European markets closed, while the Dow Jones was down 0.9%.

On currency markets one pound could buy 1.3204 dollars or 1.2001 euros, a drop of 0.06% against both currencies.

In company news, shares in Dignity fell heavily, by 11.8%, after the funerals business said death rates were easing off following Covid.

Covid might have seen a big spike in funerals, but restrictions on how many people were able to gather for them meant reduced takings for companies like Dignity.

Shares in Saga also tanked as the business, which targets older customers for cruises and insurance, did not set any firm guidance for 2023.

The business reported a rise in revenue and a narrowing of pre-tax profit, but did not set a final dividend, which analysts said also contributed to the share drop.

Shares were down 8.4%.

Although Pendragon warned that the conflict in Ukraine might restrict supplies, its shares ended the day up 1.8%.

Pre-tax profits reached over £73 million last year compared with losses of nearly £30 million the year before.