Housebuilder Persimmon said the number of homes built slumped by more than 40% in the first three months of this year, as mortgage rates deterred buyers.

Persimmon built 1,136 homes in the first quarter, compared to 1,950 the same period a year earlier.

However, chief executive Dean Finch said there had been some signs of encouragement in recent weeks with visitor numbers up, cancellation levels normalising, and sales rates continuing the steady improvement evident since the start of the year. 

“If sales rates continue at the levels seen year to date, we would expect full year 2023 volumes to be toward the top end of the previously indicated range of 8,000 to 9,000 completions,” he said.

The brighter outlook saw the shares close 60.50p (4.89%) higher at 1298p, dragging others in the sector such as Taylor Wimpey and Barratt Developments higher.

The FTSE 100 closed 38.49 points lower at 7,852.64.

Scotland’s GDP grows

The Scottish economy grew by 0.2% during the second month of this year, after growing by 0.7% in January (revised down from 0.9%).

In the three months to February, GDP is estimated to have grown by 0.4%, compared to the previous three month period.

Scottish Secretary Alister Jack said: “It’s encouraging to see further growth in the economy. The economic outlook is looking brighter than expected and, due to the swift action of this Government, we are set to avoid recession .

“We are focused on halving inflation, reducing debt and growing the economy. That includes the UK Government investing more than £2.2bn across Scotland to create jobs and opportunities, and boost trade and investment.”

Heathrow

Passengers have been advised that travel arrangements will be “as normal” at Heathrow airport, despite plans for staff strikes.

Heathrow said it had put in place “robust contingency plans kept the airport running smoothly” in the face of strikes by members of Unite union.

Passenger numbers are up by 74% on last year, when Covid restrictions still impacted on the sector.

Global markets

US markets dipped in response to more disappointing news around the banking sector, including First Republic Bank which said deposits continued to fall slightly, although withdrawals had stabilised this month.

Shares in Wells Fargo closed down 2.2%, while Bank of America was 3.1% lower and JPMorgan Chase down 2.2%.

The S&P 500 fell 1.6%, and the Dow Jones Industrial Average was 1% lower, marking the largest single-day declines for both indexes since 22 March.

The tech-heavy Nasdaq Composite plunged 2%, its biggest decline since 9 March, despite solid figures from Microsoft and Google owner Alphabet.

Alphabet said it would buy back $70bn (€63.8bn) in stock and posted first-quarter revenue above estimates as demand rose for cloud services and ad sales held up better than expected.

Investors cheered the buyback plan, sending shares of the Google parent about 4% higher in extended trading.

Microsoft beat Wall Street’s estimates for third-quarter revenue, driven by growth in its cloud computing and Office productivity software businesses.

Shares gained 4% in after-market trading after profits came in at $2.45 per share, beating Wall St estimates of $2.23.

In Tokyo, the Nikkei 225 stock index was down 0.7%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was up 1%.