By Patrick Munnelly, Market Strategist, Tickmill
The FTSE 100 faded into the finish after ceding Tuesday’s optimism. The index fell 3 points to 7624.34 by the close.
FTSE 100 biggest movers
The principle catalyst for today’s move lower came from UK housebuilders seeing a decline in their shares, with the housebuilders’ index falling by 1.3%.
Among the companies affected, Persimmon LON:PSON -1.8% and Taylor Wimpey LON:TW. -0.72% were top percentage losers behind property investment firm Segro LON:SGRO sitting at the bottom of the index shedding 2.3% .
House price fall hits Housebuilders
The downturn was triggered by a report from mortgage lender Halifax, which revealed that British house prices had dropped on an annual basis in May. This marked the first year-over-year decline in 11 years and could be further exacerbated by the increased mortgage rates, placing pressure on potential buyers.
The average property price experienced a 1% decrease compared to the previous year, aligning with the predictions of a Reuters poll.
Additionally, prices remained unchanged on a monthly basis compared to April when they had declined by 0.4%.
All constituents of the housing index faced a decline ranging from 0.8% to 1.8%. Notably, Despite these setbacks, the housebuilders’ index has achieved a year-to-date gain of over 12%.
On the positive side of the ledger, shares of Vodafone Group LON:VOD advanced by over 2% following a report indicating that the merger between its UK mobile operations and Three is nearing finalisation.
Vodafone merger with Three unlikely to find approval
However, investors have little reason to be optimistic about the deal. The Competition & Markets Authority is unlikely to approve the merger, considering that both companies are among the four largest mobile operators in the UK.
The recent history of the antitrust watchdog reinforces this scepticism.
It previously blocked Microsoft’s acquisition of Activision Blizzard and determined that Broadcom’s attempt to acquire VMWare would harm competition.
These decisions suggest that the chances of the Vodafone-Three merger gaining regulatory approval are slim.
Interestingly, the jump in Vodafone’s shares can be attributed to their recent plunge to a 16-year low, for Vodafone, a 2% increase represents a significant development these days, however, the standout winner on the day was BT Group LON:BT.A sitting on the top of the index with gains of just under 4% on the session.
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