London close: Homebuilder and travel stocks pace losses
London stocks slipped, led lower by weakness in the housebuilding sector, as worries about Brexit and Sino-US relations weighed on investor sentiment.
The FTSE 100 was down 0.51% at 7,310.88, while the pound was up 0.08% against the dollar at 1.2719 but off by 0.01% versus the euro at 1.1392.
As far as Brexit is concerned, IG analyst Joshua Mahony said: "For all the talk of a ‘bold’ new Brexit offer from the Prime Minister, the reports that such a deal would include the Northern Ireland backstop are already leading us to believe she will see yet another failed vote next month.
"There is little reason to believe that a new leader would find any greater success in putting together a more attractive deal with the EU, and thus markets are aware that the change of leadership will ensure a no-deal Brexit is on the table as Farage breathes down their neck."
More broadly, relations between the US and China were in focus again as European chipmakers, Infineon Technologies and AMS, said they have not stopped shipments to China's Huawei, after it was reported over the weekend that US technology companies have, in order to comply with President Trump's executive order. These include Google, Intel Corp, Qualcomm and Broadcom.
"Trade tensions rumble on and that has weighed on market confidence. Seeing as the US have taken a tough stance against Huawei, traders are not hopeful that the US-China trade dispute will be resolved quickly," said CMC Markets UK's David Madden.
"The rally at the back end of last week it starting to look like a relief rally, and this move could be the beginning of the next major move lower. While the US-China trade situation remains in limbo, sentiment is likely to be poor."
In equity markets, housebuilders were the worst performers on the top flight index, with Barratt Developments, Persimmon, Taylor Wimpey and Berkeley Group all succumbing to selling after the latest survey from Rightmove highlighted weakness in the London market.
According to the survey, house prices rose 0.9% on the month in May compared to a 1.1% increase in April. On the year, prices were 0.1% higher, versus a 0.1% drop the month before.
Rightmove said four out of 11 regions were "bucking the Brexit blues", with Wales, the West and East Midlands and the North West all setting new asking price records for newly-market property.
However, in the capital, just two of the 32 boroughs - Barking and Dagenham and Bexley - saw prices increase.
A trading update from Foxtons added to the downbeat tone as it said revenue in the first quarter declined as Brexit uncertainty continued to dent the London market, which remains "very challenging".
Elsewhere, TUI was the biggest faller on the FTSE 100 throughout much of the session as small-cap peer Thomas Cook tumbled again after reports over the weekend that one of its payment intermediaries wants to extend the period for which it retains holidaymakers' payments for trips.
The news Ryanair slumped as it posted a 29% drop in full-year profit due to falling fares and issued a cautious outlook, dragging EasyJet and International Consolidated Airlines Group down with it.
Madame Tussauds owner Merlin Entertainments fell sharply on the back of a downgrade to 'reduce' at HSBC.
Marks & Spencer was weaker following a report that the retailer is accelerating plans to close stores. According to the Times, M&S is on track to close 100 outlets by the end of 2020, almost two years ahead of schedule.
Merlin Entertinaments, which owns attractions such as Legoland and Madame Tussauds, fell sharply on the back of a downgrade to 'reduce' at HSBC, whose analystsreferenced the company's "sluggish" long term underlying performance as the reason behind their changed views on the company, telling clients the firm was "losing its magic".
Going the other way, IT infrastructure provider Softcat gained as it said full-year results will now be slightly ahead of previous expectations.
The JPMorgan Indian Investment Trust followed suit as exit polls suggested that incumbent Prime Minister Narendra Modi was on track for a decisive victory and a second term.
Greggs also made gains, after analysts at Berenberg upped their target price on the bakery chain from 1,600p to 1,780p, praising the group for its "excellent start" to the year.
FTSE 100 - Risers
Vodafone Group (VOD) 126.40p 1.71%
Imperial Brands (IMB) 2,187.00p 1.18%
Evraz (EVR) 575.60p 1.16%
Fresnillo (FRES) 735.20p 0.85%
British American Tobacco (BATS) 2,970.00p 0.49%
Rolls-Royce Holdings (RR.) 941.20p 0.45%
DCC (DCC) 7,016.00p 0.34%
Next (NXT) 5,798.00p 0.31%
BT Group (BT.A) 203.25p 0.25%
Compass Group (CPG) 1,804.50p 0.22%
FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 2,672.00p -6.70%
TUI AG Reg Shs (DI) (TUI) 776.89p -6.42%
Barratt Developments (BDEV) 586.80p -4.37%
Taylor Wimpey (TW.) 171.50p -3.43%
easyJet (EZJ) 990.00p -3.41%
Persimmon (PSN) 2,046.00p -3.35%
Berkeley Group Holdings (The) (BKG) 3,653.00p -3.33%
Scottish Mortgage Inv Trust (SMT) 507.64p -2.87%
Mondi (MNDI) 1,656.00p -2.85%
Burberry Group (BRBY) 1,802.00p -2.73%
FTSE 250 - Risers
Greggs (GRG) 2,108.00p 3.93%
Aston Martin Lagonda Global Holdings (AML) 902.40p 3.72%
JPMorgan Indian Investment Trust (JII) 739.00p 3.65%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,594.00p 2.44%
3i Infrastructure (3IN) 285.50p 2.15%
Syncona Limited NPV (SYNC) 253.00p 2.02%
Tritax Big Box Reit (BBOX) 151.90p 1.95%
Hilton Food Group (HFG) 1,066.00p 1.91%
Games Workshop Group (GAW) 4,466.00p 1.55%
Vietnam Enterprise Investments (DI) (VEIL) 441.00p 1.38%
FTSE 250 - Fallers
Merlin Entertainments (MERL) 350.00p -6.69%
Stobart Group Ltd. (STOB) 115.00p -5.64%
Saga (SAGA) 49.12p -4.99%
Countryside Properties (CSP) 308.80p -4.51%
Domino's Pizza Group (DOM) 236.00p -4.10%
Indivior (INDV) 46.63p -3.97%
Charter Court Financial Services Group (CCFS) 338.00p -3.72%
Vesuvius (VSVS) 520.50p -3.61%
TI Fluid Systems (TIFS) 185.00p -3.55%
Genus (GNS) 2,740.00p -3.52%