- FTSE 100 closes in red
- Housebuilders ordered to remove unfair leasehold contract terms
- Reach to push for more home working
5.15pm: FTSE 100 closes firmly lower
FTSE 100 closed in the doldrums on Friday as traders were put off buying shares by a US Fed action, which will affect banks.
The UK’s index of leading shares joined other European indices to head south, falling 71 points to close at 6,708. The FTSE 250 lost over 148 at 21,420.
“The downward pressure on equities picked up when the Fed announced they would not be extending the supplementary leverage ratio (SLR) – a mechanism that requires US banks to hold less capital reserves so they could free up cash to inject into the economy in the form of loans,” said David Madden, analyst at London-based CMC Markets.
“Traders reacted by selling stocks as they took the view that if banks are more restricted in terms of capital requirements, that is likely to hold back the recovery somewhat.”
Over the week as a whole, Footsie dropped 0.78%.
On Wall Street stocks were mixed with the Dow Jones Industrial Average off 144 points, the S&P 500 ahead by nearly eight points and the Nasdaq up over 115 points to 13,231.
3.50pm: Taylor Wimpey, Countryside Properties receive CMA order on leasehold contracts
FTSE 100 dropped another few points before close and was down by 60 to 6,718.
Sterling, instead, trimmed its losses and shed 0.5% to US$1.3853.
Taylor Wimpey PLC (LON:TW.) and Countryside Properties PLC (LON:CSP) both dipped 2% to 181.75p and 513p respectively after an order by the Competition and Markets Authority.
The two housebuilders were asked to remove unfair contract terms for leasehold agreements, outlining specific concerns about contracts that can see the cost of ground rents doubling every ten to fifteen years.
The CMA said the contracts break consumer protection law, affects owners’ property rights and can mean owners struggling to sell or mortgage properties.
The City reckons Barratt Developments (LON:BDEV) and Persimmon plc (LON:PSN) will receive similar orders given the government’s position on leaseholds.
“Both businesses have already taken provisions against this, but these figures may need to be reviewed,” analysts at Peel Hunt commented.
“Overall we would see this as a small negative for these businesses and the broader sector, but these practices have been stopped for some time and the outcome of this investigation is not a surprise.”
3pm: Daily Mirror owner Reach to close London office in remote working stride
FTSE 100 cut its losses again and was down 55 points to 6,723 in the afternoon, while sterling plunged further in the red and shed 0.6% to US$1.3837.
Reach PLC (LON:RCH), the owner of Daily Mirror, Sunday Mirror and several regional publications, dipped 2% to 210.19p after its huge stride towards home working was uncovered.
The publisher is planning to close its Lower Thames Street office in central London and downsize the Canary Wharf space from two floors from one.
Most employees will work remotely as a permanent measure, City A.M. reported.
It’s not clear how much money the move, which comes after Reach deemed remote working during the pandemic successful, will save.
Editorial production staff is expected to be permanently based in the office while others will be linked to one of the 15 ‘hubs’ located in the UK they will be required to attend at times.
Earlier this month, the media company posted lower revenues and profits, while last year it cut 550 jobs to make up for losses in advertising revenue.
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Read More: FTSE 100 drops another few points; Taylor Wimpey PLC, Countryside Properties PLC