FTSE decline continues
The FTSE 100 Index lost ground for the second session in a row today after US home sales plunged to a record low during May.
The blue chip index shed 68.5 points to 5178.5 or 1.3% following the 33% fall, which came after a tax credit scheme to support the housing market expired at the end of April.
Wall Street's Dow Jones Industrial Average edged lower as markets also awaited the latest verdict on the recovery from the US Federal Reserve later this evening, although interest rates are likely to remain unchanged.
In London, attention on England's nervy World Cup win against Slovenia dampened volumes, with London Stock Exchange figures showing £4.2bn (€5.1bn) in shares traded - well below the £5.9bn (€7.17bn) average daily turnover seen in May.
Investors were also digesting George Osborne's emergency Budget, which helped the pound cheer to $1.49 today amid approval of the Chancellor's deficit tackling moves.
The currency was also helped after it emerged a member of the Bank of England rate-setting committee voted for a hike in interest rates earlier this month.
Andrew Sentance became the first policymaker to call for a tightening in monetary policy since Tim Besley in August 2008, with his surprise decision also helping sterling rally above 1.21 against the euro.
Elsewhere, there was some relief that Mr Osborne's emergency Budget was less severe on the business community than many had feared.
While VAT increased from 17.5% to 20%, the move was delayed until early January and contained no additional taxation on selected product areas.
A number of retailers were on the front foot, including Marks & Spencer with a rise of 2.5p to 350.9p, fashion chain Next added 20p to 2190p, although B&Q owner Kingfisher lost early gains to stand unchanged at 228.4p. Debenhams - rated a 'buy' by Investec - cheered 1.2p to 61.1p in the FTSE 250.
The sector also benefited from results by Comet chain Kesa Electricals, which returned to profit with a performance ahead of City expectations. With Bank of America raising its price target on the stock, Kesa lifted 2.2p to 119.6p.
Elsewhere, BP shares lost more ground after sinking to their lowest point in 13 years at one stage yesterday. The stock, which has lost around 50% of its value since the Gulf of Mexico explosion in April, fell 0.7p to 333.5p after appointing board director Bob Dudley as the day-to-day head of the clean-up operation.
In the FTSE 250 Index, Stagecoach shares were higher after it revealed an improved trend and outlook for its UK rail division.
The South West Trains and East Midland franchise operator edged 0.2p up to 190.8p, even though bottom-line profits fell 24% in the year to April 30.
The biggest Footsie risers were Reed Elsevier up 8.6p to 502p, Next ahead 20p to 2190p, Tesco up 3.5p to 396.5p and Cable & Wireless up 0.8p to 92p.
The biggest Footsie fallers were Wolseley down 81p to 1481p, Barclays off 9.95p to 300.8p, Lonmin down 54p to 1637p and Segro down 8.2p to 262.3p.
