THURSDAY MARKET CLOSE: Builders tumble as Carney pulls the rug

HOUSE builders endured a torrid session after the Bank of England announced it would be ending one of its support schemes for the domestic mortgage market.

The firms had been enjoying a strong revival this year with the bank’s Funding for Lending scheme and the UK government’s Help to Buy initiative running in tandem, but governor Mark Carney pulled some of his backing amid fears of a house price bubble.

Michael Hewson, chief market analyst at CMC, said: “The withdrawal of the availability of this cheap source of funding appears to have acted as a spur for a bout of profit taking on a sector that has enjoyed stellar gains since the March budget.”

Sign up to our daily newsletter

Persimmon was the biggest top flight faller, down 76p or more that 6 per cent at 1,170p, while builders’ merchant Travis Perkins dropped 49p to 1,783p. In the FTSE 250 Bellway, Bovis Homes and Taylor Wimpey were also flagging – all were nursing losses of around 6 per cent at 1,446p, 777p and 107.4p respectively.

B&Q owner Kingfisher was also on the slide after missing analysts’ expectations on its latest set of numbers. The shares lost 4.4 per cent, down 17.4p at 378.6p, following a third-quarter update in which the DIY retailer said trading conditions remained “challenging”.

The wider FTSE 100 drifted in the absence of any impetus from Wall Street, where traders are away for the Thanksgiving holiday. However, there was enough goodwill to offset the builders’ collapse and the index closed five points higher at 6,654.47.

Outside the top flight, pub chain Marston’s dropped 7 per cent after it posted a below-inflation 1 per cent rise in profits for the year to October. The company also announced the £90 million sale of 202 pubs to a retail property firm, a move that will help it reduce the interest payments on its £1 billion debt mountain, but shares still closed 11.4p lower at 143.7p.

At the other end of the FTSE 250, shares in Thomas Cook jumped by 15 per cent after the holiday giant slashed losses and highlighted further steps in its turnaround. Its shares rose 22.5p to 175.7p, while blue-chip rival Tui Travel benefited from the improved sentiment in the sector as shares rose 6.9p to 369.7p.