Sainsbury’s leads FTSE 100 lower, housebuilders hit by Taylor Wimpey warning

Workers unload a Sainsbury’s home delivery van in central London, Britain, April 30, 2018. — Reuters pic
Workers unload a Sainsbury’s home delivery van in central London, Britain, April 30, 2018. — Reuters pic

LONDON, April 25 — British shares were in the red today as Sainsbury’s shares soured after the company scrapped its proposed takeover of Walmart’s Asda while Taylor Wimpey’s warning on margins whacked housebuilders across the board.

The FTSE 100 lost 0.7 per cent and the FTSE 250 down 0.5 per cent by 0730 GMT.

Taylor Wimpey shed 6.6 per cent after it warned full-year margins would be slightly lower than last year as it cost more to build homes.

Fellow blue-chip housebuilders slipped after the update from Britain’s third-largest homebuilder. Persimmon fell 4 per cent, Barratt gave up 3.3 per cent and Berkeley lost 2.3 per cent.

Sainsbury’s tumbled 6 per cent to a near three-year low after the supermarket chain scrapped its proposed 7.3 billion pound takeover of Walmart-owned Asda after the deal was blocked by Britain’s competition regulator.

Shares of rivals Tesco, Morrisons and Ocado were down between 1.6 per cent and 2.1 per cent.

Barclays’ first-quarter profits fell 10 per cent as tough market conditions led to lower earnings at its under-pressure investment bank, sending shares down 1.3 per cent.

Stocks trading ex-dividend also dragged the main bourse lower. Legal and General gave up 4.9 per cent, miner Antofagasta shed 3.3 per cent and Glencore fell 2.5 per cent.

Housebuilders on the mid-cap index were also left reeling after Taylor Wimpey’s statement. Bovis Homes skidded 5.4 per cent while Redrow, Bellway and Crest Nicholson all fell at least 4 per cent.

Tullow Oil sank 5 per cent after lowering 2019 output guidance due to problems at its Ghana fields.

Among small stocks, flooring retailer Carpetright surged 47 per cent on track for its best day in almost 26 years as it saw significant improvement in UK like-for-like sales in its latest quarter, indicating that restructuring efforts were beginning to pay off. — Reuters

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