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FTSE falls as investors' focus shifts from politics

FTSE falls as investors' focus shifts from politics

The FTSE 100 has fallen into the red as investors shifted their focus from UK politics to company developments, after the government survived a vote of no confidence last night.

The UK blue-chip index fell 34 points, or 0.5%, to 6,829, with ITV (ITV) the biggest faller, down 5.8% at 129.3p after analysts at Bank of America Merrill Lynch downgraded the stock and a raft of other European broadcasters, warning TV networks were losing advertising share.

Financial stocks were also in the red, knocked by weak results from France's Société Générale (GLE.PA). Online stockbroker Hargreaves Lansdown (HRGV) fell 1.8% to £17.79, Standard Chartered (STAN) bank fell 1.3% to 603.9p and insurer Prudential (PRU) dropped 1.5% to £14.46.

House builders meanwhile dipped, as a survey of property valuers reported the worst three-month outlook for UK sales on record and growth forecasts for London slumped to their lowest point in two decades.

Berkeley (BKG) fell 18p to £37.82, Taylor Wimpey (TW) was down 1% at 162.5p and Persimmon (PSN) traded 8p lower at £23.12.

The government's survival of a no confidence vote, by 325 votes to 306, was of scant surprise and did little to move markets. The pound was trading at $1.289, up 0.1% on the day.

Associated British Foods (ABF), owner of Primark, jumped 6.3% to £23.16p after sticking to its full-year earnings guidance, with revenue growth across the business leading up to Christmas except in its sugar business.

And despite like-for-like sales down slightly for Primark on the previous year, the fast-fashion retailer delivered a 4% rise in total sales in the run-up to Christmas in line with market expectations.

‘Once again it appears that economic uncertainty in Britain, at this stage centred largely on Brexit, has driven cautious consumers into the arms of discount retailers,' said Fiona Cincotta, senior market analyst at City Index.

‘A small black spot in this result is the 10% cut to the forecast increase in Primark's net selling space this financial year, owing in part to a delayed store opening in New Jersey.

‘Crucially, though, Primark's US expansion appears to have gotten off to an otherwise excellent start. And that's the place where a lot of the company's future growth will have to come from.’

Shares in Sage (SGE) rose 5.5% to 625.6p, after the software company delivered a 7.6% rise in first-quarter organic service revenue to £645 million.

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