Fears over Barclays sell-off drag the FTSE 100 down

THE FTSE 100 ended down 0.7 per cent yesterday, hurt by banks after a major shareholder sold its holding in Barclays, although improving US pending home sales lent some support.<br /><br />The index closed 29.17 points lower at 4,477.02, giving up some of the previous session&rsquo;s 2 per cent rise.<br /><br /><strong>Barclays</strong> topped the FTSE 100 losers&rsquo; list, down 13.5 per cent after the Abu Dhabi government-owned International Petroleum Investment Company sold a more than 11 per cent stake in the bank, raising fears that other investors may cash in on a recent rally in bank shares.<br /><br />Banks shaved the most points off the index. <strong>HSBC, Royal Bank of Scotland, Lloyds Banking Group</strong> and S<strong>tandard Chartered</strong> were off 0.6 per cent to 5.2 per cent.<br /><br />&ldquo;At some stage the market has got to consolidate and pull back. We had a very big run up yesterday,&rdquo; said David Morrison, market strategist at GFT Global Markets.<br /><br />Pharmaceuticals, conversely, were another drag on the index as investors rotated out of the sector. <strong>AstraZeneca</strong> fell 2.5 per cent and <strong>GlaxoSmithKline</strong> slipped 1.1 per cent.<br /><br /><strong>WPP Group</strong> sank 5.4 per cent. The world&rsquo;s largest advertising group by revenue said the key like-for-like revenue metric, which strips out the impact of acquisitions and currency, fell 6.7 per cent in the first four months of the year.<br /><br />Pending sales of previously owned US homes in April unexpectedly saw their biggest monthly gain in seven and half years, a report from a trade group showed, buttressing views the US recession was easing.<br /><br />In the UK, mortgage approvals for house purchase were slightly higher than expected in April, but still at a subdued level that points to further house price falls, official data showed.<br /><br />Miners were firmer, with <strong>Rio Tinto, Xstrata, Fresnillo, Randgold Resources</strong> and <strong>Lonmin</strong> up between 1.5 per cent and 3 per cent.<br /><br />The chief executive of Rio Tinto&rsquo;s copper unit, however, said it sees a risk that a strong rally in copper prices may reverse over the next six to nine months.<br /><br />Oil producers also gained, with <strong>Royal Dutch Shell</strong> up 0.2 percent and <strong>BP</strong> rising 1 per cent.<br /><br />Europe&rsquo;s biggest home improvements retailer, <strong>Kingfisher</strong>, rose 3.8 per cent to top the blue-chip gainers after its forecast beating results.<br /><br />Peer <strong>Home Retail</strong> got a boost from the results, up 2.9 per cent, while high street stalwart <strong>Marks &amp; Spencer</strong> put on 0.6 per cent.