FTSE falls on house firms

The FTSE lost 0.31 per cent at 09:45 BST in London led by home improvement firms on concerns a slowing housing market will impact sales.

Building merchant Wolseley was the biggest loser in morning trading, declining 2.6 per cent, amid rumours the company would be forced to announce a rights issue.

Home Retail Group, which owns Homebase and Argos and yesterday warned of declining sales for the DIY retailer, fell 2.3 per cent while Kingfisher, which owns rival B&Q, saw a 2.2 per cent fall in the value of its sales.

Housebuilder Persimmon also saw a decline of 2.1 per cent this morning. The company said last week it would hold off on building new houses until credit conditions improved.

Yesterday, Nationwide reported the first year-on-year fall in the housing market after the average house price fell one per cent from April last year. Prices were down one per cent year-on-year to April.

British Airways advanced 3.4 per cent on rumours of a potential alliance with two of its largest US rivals American Airlines and Continental Airlines, while mining companies Xstrata, Anglo American and BHP Biliton also saw rises on higher metal prices.