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* Housebuilders lead declines on FTSE 100
* Plus500 gains after upbeat forecast
* Avecta plunges on pausing sales of COVID-19 antigen test
* FTSE 100 down 0.5%, FTSE 250 off 1.5%
(Updates to close)
Jan 10 (Reuters) - UK's blue-chip index ended lower on
Monday as housebuilders were hit by $5.4 billion in costs to
remove cladding from buildings, while a weaker pound lifted
consumer staples.
The FTSE 100 ended 0.5% lower following weekly gains
spurred by a rotation into sectors such as banks, oil & gas and
mining as investors priced in faster interest rate hikes by
major central banks.
Large dollar earners including Diageo, Unilever
, British American Tobacco, Reckitt Benckiser
gained between 0.7% and 2%, lifted by the weaker pound.
Berkeley Group, Barratt Developments,
Persimmon and Taylor Wimpey were down between
3.0% and 2.8% after Britain ordered housebuilders to pay around
$5.4 billion to help remove dangerous cladding from buildings
following a deadly 2017 London fire.
Housing minister Michael Gove set an early-March deadline
for the industry to agree to a fully funded plan of action,
including a dedicated fund to deal with unsafe cladding.
"The housebuilders have benefited from generous incentives,
such as Help to Buy and the mortgage guarantee scheme, in recent
years. However, state support is not a one-way street and the
sector needs to do its bit to look after its customers," said
Russ Mould, investment director at AJ Bell.
Persimmon had the least risk due to its low exposure, while
Barratt, Bellway, Berkeley & Taylor Wimpey all had the higher
risk of a more meaningful step up in provisions, Jefferies
analysts said.
Housebuilders Redrow, Countryside Properties
, Bellway and Vistry Group dropped
between 2.8% and 4.4%, while the FTSE 250 index slipped
1.5%, recording its fourth consecutive-session in losses.
Big banks such as HSBC, Barclays and
Standard Chartered rose about 1% each, building on last
week's gains.
Plus500 rose 3.1% after the online trading
platform said it expects annual results to exceed market
expectations, even as it reported slower fourth-quarter growth.
Biotech firm Avacta Group slumped 33.4% after it
said it was halting sales of its COVID-19 antigen lateral flow
test, AffiDX, to replace antibodies in the device and boost its
ability to detect the Omicron variant at lower viral loads.
(Reporting by Sruthi Shankar and Amal S in Bengaluru; Editing
by Shounak Dasgupta, William Maclean)
