LONDON (Reuters) - Britain’s top equity index fell on Monday for the first time in a week as declines in housebuilding shares weighed on the market, which had been approaching record highs.
The blue-chip FTSE 100 index .FTSE, which had risen for the last four sessions, ended down by 0.4 percent, or 24.64 points, at 6,800.56 points - some 2 percent below a December 1999 record high of 6,950.60 points.
“I suspect that the market will keep trending up, but for the moment we’re neutral on it,” said Logic Investments’ director of trading Darren Easton.
The companies were hit by comments over the weekend from David Miles, seen as one of the Bank of England’s most dovish policymakers, who said it was increasingly likely he would vote to raise interest rates before leaving the BoE’s monetary policy committee next May.
The housebuilding and property sector has been one of the best-performing segments of the UK stock market. Record low interest rates and home-buying incentives pushed the FTSE 350 Construction & Building Materials Index .FTNMX2350 up 23.4 percent last year.
However, the likelihood that interest rates may start to rise has since tempered its performance, and the construction and building materials index fell 2.4 percent on Monday.
“Interest rates may be rising sooner rather than later, and that’s been the cause for a bit of a backlash for the housebuilders,” said JNF Capital trader Rick Jones.
Although the FTSE has edged up by around 1 percent since the start of 2014, traders say its progress has been hampered by the index’s inability so far to get past the 6,900 point barrier.
“Technically the market is a little bit in no man’s land and needs to clear 6,900 to the upside for further gains,” said Mike Mason, senior trader at Sucden Financial.
Additional reporting by Alistair Smout; Editing by Catherine Evans