LONDON MARKETS: FTSE 100 Bruised By Weaker-than-forecast PMIs

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- U.K. stocks declined on Tuesday on the back of weaker-than-expected construction data, while fresh home-price data raised uncertainty about the housing market.

The FTSE 100 index dropped 0.4% to close at 6,836.30, marking the lowest level since May 23.

The benchmark opened in negative territory, in line with the rest of Europe, but nudged a leg lower mid-morning after the U.K. construction purchasing managers' index for May fell short of forecasts. The Markit/CIPS PMI for the construction sector dropped to 60 in May, from 60.8 in April. That was below the 61 level expected by analysts and marked the slowest pace of expansion since October 2013.

Additionally, data from mortgage lender Nationwide showed housing prices in May rose more than expected year-on-year. However, the month-on-month increase was lower than in April. Farhan Ahmad, trader at TradeNext, said in a note that this monthly slowdown "could be the first signs of a broader contraction."

Home builders were among major decliners in London after the data. Shares of Barratt Developments PLC dropped 1.8%, Taylor Wimpey PLC lost 2%, and Persimmon PLC erased 1.2%.

Grocery firms were also in the spotlight after Kantar published data on U.K. supermarkets. The research company said Tesco PLC's (TSCDF) market share fell to 29% from 30.5% in the 12 weeks to May 25, according to media reports, sending the shares 1.5% lower.

Outside the main index in London, shares of Foxtons Group PLC sank 6.6% after the real-estate firm said Chief Executive Michael Brown would step down for personal reasons.

On a more upbeat note, shares of Wolseley PLC climbed 2.9% after the distributor of heating and plumbing products reported strong growth in the U.S. and the Nordic countries during the third quarter

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