Construction slows, bringing index down

housebuildingTue close: A slowdown in construction activity and concerns over Greece pushed the FTSE100 into another downward spiral, closing 7.41 points lower at 6,681.21.

July’s contraction in the construction industry is the first for three months.

However, a report from Nationwide showed UK house prices rose 3.5% year-on-year in July, as expected, accelerating from the previous month’s 3.3% gain.

The Athens General Index dropped for a second day after falling as much as 23% on Monday on concerns over the country’s bailout talks and economy.

Company news was led by Shire as the Dublin-headquartered pharmaceuticals group made a hostile takeover approach for US immune deficiencies specialist Baxalta at roughly $30.6bn, only a month after it was spun out by Baxter International.

Royal Bank of Scotland recovered in afternoon trade from an earlier decline as the government sold a 5.4% stake in the part-owned state bank.

Standard Life slipped after the insurer reported a drop in first half revenue, blaming market volatility. Meggitt gained after posting a 6% rise in underlying first-half pre-tax profit as stronger-than-expected military revenue offset challenging conditions in the energy market, and announced two contract wins.

Smiths Group advanced after it emerged that US activist hedge fund ValueAct is a shareholder. According to theFinancial Times, ValueAct’s stake in Smiths is below the 5% required for disclosure to the London Stock Exchange.

ARM Holdings edged lower after announcing a reshuffling of the board with Stephen Pusey and Lawton Fitt appointed as independent non-executive directors.

Direct Line Insurance Group climbed as it reported a rise in pre-tax profit for the first half and raised its interim dividend.

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