London's blue-chip shares finished lower as Wall Street remained weaker after investors received mixed news on US housing data, with Tesco remaining down in the blue chips following disappointing first-quarter UK sales growth.

The FTSE 100 was 53.5 points lower at 6,650.2 at the close. The FTSE 250 index was down 130.3 at 11,817.2.

In New York, Wall Street was lower after mixed housing data and weaker-than-expected quarterly results from consumer electronics retailer Best Buy.

Investors received mixed news on the housing sector after a disappointing survey yesterday that suggested market conditions were continuing to deteriorate.

Housing starts fell 2.1 per ent in May to a 1.474 million unit annual rate, broadly in line with expectations. April housing starts were also revised lower.

By London’s close, the Dow Jones Industrial Average index was down 19.3 points at 13,593.7, while the tech-dominated Nasdaq lost 8.25 points at 2,618.35.

The Standard & Poor’s 500 index fell back 1.21 points to 1,529.85.

On the blue chip downside, Tesco was the worst performer, off 22.25p or 5 per cent at 434.5p, after releasing first-quarter sales which came in at the lower end of consensus but which left most brokers unfazed despite a backdrop of sluggish UK sales growth.

For the 13 weeks to May 26, UK like-for-like sales excluding petrol were up 4.7 per cent, at the bootom end of forecasts.

In reaction, Panmure Gordon reiterated its ’buy’ advice and pointed out that events at J Sainsbury have shifted the focus back to property and also to what might happen if a substantial chunk of the market were to be debt-financed.

It said Tesco has the best property portfolio and, as the sector leader by a long way, should benefit from a softer margin environment.

The sales news from Tesco weighed on the sector with M&S down 17.5p at 670p and J Sainsbury off 2.5p at 581p.

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