BAT, homebuilders drag London stocks lower

Reuters

Published Jun 09, 2020 08:22

Updated Jun 09, 2020 09:40

By Shreyashi Sanyal and Shashank Nayar

(Reuters) - London-listed stocks fell for a second straight day on Tuesday, weighed down by forecast cuts from British American Tobacco , while fewer home sales by Bellway showed the pain inflicted by country-wide lockdowns on the housing sector.

The cigarette maker (L:BATS) fell 2.5% after it flagged a demand hit due to prolonged lockdowns in South Africa and Mexico and weak sales in countries including Bangladesh and Vietnam.

The blue-chip FTSE 100 (FTSE) declined 0.5%, with recent winners and more cyclical stocks, including life insurers (FTNMX8570) and banks (FTNMX8350), posting some of the biggest declines.

"There isn't the same amount of enthusiasm or risk appetite right now for London stocks as opposed to the sentiment we are seeing for U.S. or Asian stocks," said David Madden, markets analyst at CMC markets UK.

"There is a pause in optimism among investors as London stocks have underperformed other markets globally even before the lockdown restrictions were put to place and continue to show weakness in contrast to other markets (U.S. and Asia)."

But British stocks have marked a striking rise from lows hit in March on hopes of an economic recovery after coronavirus-driven curbs on social and business activity were eased.

Among shares, Bellway Plc (L:BWY) dropped 1.4%, dragging its peers down with it, as the housebuilder sold fewer homes between August and May due to restricted business activity induced by the coronavirus lockdown.

Heavyweight homebuilding stocks also pressured the mid-cap FTSE 250 (FTMC), which fell 1.3%, eying its biggest one-day percentage fall in 11 days.