May 1 (Bloomberg) -- U.K. stocks slid, led by construction companies on concern a slowing U.S. housing market will erode earnings growth in the industry.

Hanson Plc, the world's largest supplier of crushed rock used in construction, led the decline. Balfour Beatty Plc, the U.K.'s biggest construction company, also fell.

``The longer the U.S. housing slump continues, the more likely we will see investors cashing in on the good year-to-date performance of building stocks,'' said Stephen Pope, head of equities research at Cantor Fitzgerald Europe in London.

The benchmark FTSE 100 Index dropped 30.3, or 0.5 percent, to 6418.90 at 12:12 p.m. in London. The FTSE All-Share Index lost 13.48, or 0.4 percent, to 3342.12. Ireland's ISEQ Index advanced 0.2 percent to 9489.87.

Other western European markets, except for Denmark, were closed today for the May 1 holiday. There also is no trading in U.S. stock-index futures. Exchanges in the U.K. and Ireland will be open normal trading hours.

The FTSE 350 Construction & Materials Index, a measure for U.K. construction companies, fell 1.7 percent today, the biggest drop since March 14. The broader FTSE 350 lost 0.4 percent. The construction measure has jumped 6.7 percent this year, while the FTSE 350 has added only 3.7 percent.

Hanson shares declined 25 pence, or 2.9 percent, to 834 pence. The U.S. is the company's biggest single market. Merrill Lynch & Co. cut the shares to ``sell'' from ``neutral'' yesterday.

`Falling Demand'

``A falling U.S. housing market is resulting in falling demand for heavy-side building materials,'' Mike Bridges, an analyst at Merrill in London, wrote in a report today. ``We see further falls in U.S. housing starts'' in the second half.

Balfour Beatty lost 2 percent to 459.5 pence. The company makes about 13 percent of its revenue in the U.S.

A report from the National Association of Realtors in the U.S. today is forecast to show that pending sales of existing homes rose 0.1 percent in March, after a 0.7 percent gain the month before, according to economists surveyed.

Earlier this month, the real-estate agents group said sales of previously owned homes in March dropped to a four-year low. Today's report is scheduled for 3 p.m.

Punch Taverns Plc, a pub landlord whose shares have surged 49 percent in the past year, slid 2.4 percent to 1273 pence even after the company reported higher earnings. First-half net income rose 14 percent to 113.8 million pounds ($228 million).

`On Track'

``It is inevitable that people are going to lock in some profits,'' said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers in London. ``The company remains totally on track, but probably the wider market is not helping today.''

Shares of Schroders Plc, the largest publicly traded fund manager based in London, slipped 1.6 percent to 1274 pence, trimming this year's gain to 16 percent. The company said first- quarter pretax profit increased 30 percent as it took in more money from higher fee-paying mutual-fund clients.

Aberdeen Asset Management Plc, a competitor to Schroders, dropped 3.6 percent to 211 pence after reporting a first-half loss. The loss in the six months ended March 31 was 13.7 million pounds, compared with a profit of 15.3 million pounds a year earlier. The settlement of a legal dispute with client Real Estate Opportunities Ltd. cost the company 57.5 million pounds.

BHP Billiton, Rio Tinto

BHP Billiton Ltd., the world's largest mining company, declined 1.2 percent to 1115 pence. Rio Tinto Group, the No. 3, slid 1.3 percent to 3032 pence.

Copper futures fell as much as 0.8 percent in Asia as China, the world's biggest user of the metal, started a week-long holiday and the Peruvian government said a strike hasn't dented output. The base metal also declined in London.

Tesco Plc slipped after a newspaper reported that the retailer may make a solo bid for Coles Group Ltd.'s food, liquor and Kmart units. The stock lost 1.2 percent to 456.75 pence.

The U.K.'s biggest retailer signed a confidentiality agreement and gained access to Melbourne-based Coles' financial information, the Australian reported, without citing anyone. The newspaper last week said Tesco may team with Woolworths Ltd., Australia's largest retailer.

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

Admiral Group Plc (ADM LN) fell 11 pence, or 1 percent, to 1056. Credit Suisse Group lowered its recommendation on the best-performing U.K. insurance stock in the past six months to ``underperform'' from ``neutral.'' The company continues to look ``over-valued,'' analysts wrote.

Liberty International Plc (LII LN) rallied 21 pence, or 1.7 percent, to 1230. The U.K.'s largest owner of shopping centers reported a 69 percent jump in first-quarter profit, to 35.4 million pounds.

Nord Anglia Education Plc (NAE LN) dropped 16.5 pence, or 5.2 percent, to 304. The provider of educational services reported first-half net income of 462,000 pounds, after an 853,000-pound loss a year earlier. Revenue rose 13 percent.

Northern Rock Plc (NRK LN) slipped 20 pence, or 1.9 percent, to 1057. Citigroup Inc. cut its share price estimate for the U.K.'s seventh-largest bank by 9 percent to 1000 pence and reiterated its ``sell'' recommendation.

Northern Rock has ``underperformed the European and U.K. bank sector,'' analysts wrote in a note to clients. It is a ``trend we expect to continue given downward pressure on earnings.''

WSP Group Plc (WSH LN) lost 5 pence, or 0.7 percent, to 724. The London-based engineering-design company said markets in the first quarter remained stable and it plans acquisitions later this year.

To contact the reporter on this story: Balduin Hesse in London at bhesse2@bloomberg.net; Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: May 1, 2007 07:14 EDT