London open: Stocks decline ahead of US non-farm payrolls

London stocks dropped ahead of the US non-farm payrolls report which may provide hints on the timing of the first interest rate increase.

Employers may have added 217,000 jobs in August, compared to 215,000 the previous month, according to analysts’ expectations for the Labor Department's report. The unemployment rate is forecast to drop to 5.2% in August from 5.3% in July. Average hourly earnings are projected to climb 2.1% last month, in line with July’s growth.

The Federal Reserve is looking for signs of improvement in the labour market before raising interest rates so healthy figures will likely fuel speculation that such a move is on the cards as soon as this month.

The Fed meets on 17-18 September to decide on policy. However, the recent market volatility in global stocks, caused by concerns surrounding China, has prompted some analysts to push back their expectations for a rate hike.

A panel of former Fed officials on Thursday said the central bank is likely to hold off on lifting interest rates in September as the global economic outlook has worsened since the last policy meeting in July.

Joseph Gagnon, a former Fed member and now senior fellow at the Peterson Institute for International Economics, said the international economy has deteriorated and “not by a trivial amount”.

Gagnon along with other former Fed officials spoke at a panel discussion sponsored by the Brookings Institution.

Meanwhile, German factory orders fell 0.6% year-on-year in July, missing analysts’ expectations for a 0.4% increase and following the previous month’s 7% jump.

Closer to home, a report showed August was the worst month for British retail sales since the global financial crisis of 2008. High street sales fell 4.3% year-on-year in August, the biggest drop since November 2008 and the sixth monthly dip this year, according to accountancy firm BDO.

In morning trade, Markit’s Eurozone purchasing managers’ index on Eurozone retail is due before the main event in the afternoon with US non-farms.

Company-wise GVC Holdings slumped as it beat rival 888 Holdings in the battle for online gambling group Bwin.Party Digital Entertainment. The Sportingbet owner said Bwin has agreed to its offer of 25p in cash and 0.231 new GVC shares, which values the company at around 129.64p per share or £1.12bn. This represents a 12.5% premium to the closing price of Bwin on 3 September and a 45% premium to the closing price of Bwin on 14 May, which was the last business day before the announcement that it had received proposals. Bwin’s shares advanced.

Astrazeneca gained after winning an extension to US regulatory approval for its star blood thinning drug Brilinta to allow it to be given to patients for more than one year after a first heart attack.

Market Movers

techMARK 3,082.14 -0.73%

FTSE 100 6,130.60 -1.03%

FTSE 250 16,957.35 -0.76%

FTSE 100 - Risers

Aberdeen Asset Management (ADN) 316.50p +1.28%

Antofagasta (ANTO) 600.50p +0.67%

Rio Tinto (RIO) 2,343.50p +0.11%

AstraZeneca (AZN) 4,249.50p +0.05%

Glencore (GLEN) 131.00p +0.04%

FTSE 100 - Fallers

Next (NXT) 7,590.00p -3.19%

Dixons Carphone (DC.) 418.10p -2.97%

G4S (GFS) 242.10p -2.58%

Prudential (PRU) 1,363.50p -2.33%

Burberry Group (BRBY) 1,362.00p -2.23%

London Stock Exchange Group (LSE) 2,450.00p -2.08%

Smiths Group (SMIN) 1,091.00p -2.06%

GKN (GKN) 275.60p -2.03%

BP (BP.) 348.90p -1.95%

Coca-Cola HBC AG (CDI) (CCH) 1,301.00p -1.89%

FTSE 250 - Risers

Bwin.party Digital Entertainment (BPTY) 117.20p +1.74%

Booker Group (BOK) 178.50p +1.31%

UK Commercial Property Trust (UKCM) 87.40p +1.04%

AL Noor Hospitals Group (ANH) 858.50p +1.00%

Wizz Air Holdings (WIZZ) 1,777.00p +0.91%

AO World (AO.) 136.20p +0.89%

Auto Trader Group (AUTO) 340.00p +0.89%

NMC Health (NMC) 749.50p +0.54%

Drax Group (DRX) 279.60p +0.40%

Acacia Mining (ACA) 242.90p +0.37%

FTSE 250 - Fallers

CLS Holdings (CLI) 1,840.00p -3.16%

Serco Group (SRP) 108.40p -2.61%

Allied Minds (ALM) 464.40p -2.35%

Jupiter Fund Management (JUP) 430.00p -2.32%

Nostrum Oil & Gas (NOG) 501.50p -2.24%

Kaz Minerals (KAZ) 159.60p -2.09%

Dunelm Group (DNLM) 919.00p -2.08%

Supergroup (SGP) 1,477.00p -2.06%

Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 440.00p -1.98%

Petrofac Ltd. (PFC) 864.50p -1.93%

FTSE TechMARK - Risers

UCW Limited (UCW) A$0.01 +7.14%

Spirent Communications (SPT) 80.75p +1.89%

Oxford Instruments (OXIG) 847.00p +1.86%

Gresham Computing (GHT) 103.50p +1.47%

SDL (SDL) 373.00p +1.36%

E2V Technologies (E2V) 239.25p +0.63%

NCC Group (NCC) 245.00p +0.62%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 200.19 +0.11%

FTSE TechMARK - Fallers

Dialight (DIA) 600.00p -0.99%

Sepura (SEPU) 175.75p -0.99%

Consort Medical (CSRT) 970.50p -0.67%

Innovation Group (TIG) 39.75p -0.62%

Skyepharma (SKP) 331.25p -0.53%