London open: Stocks edge lower after US selloff; housebuilders in focus

London stocks were a little weaker in early trade on Friday following a technology-led selloff on Wall Street, as investors eyed the latest US non-farm payrolls report.

At 0830 BST, the FTSE 100 was down 0.4% at 5,829.37, paring heavier opening losses.

Han Tan, market analyst at FXTM, said: "The Nasdaq Composite Index saw a 4.96% plunge on Thursday which was its biggest single-day decline since 11 June, while the S&P 500 dropped 3.5%. The selloff was likely fuelled by concerns that the tech sector’s lofty valuations may prove unsustainable triggering a wave of profit-taking, which also left a trail of carnage in the options market.

"From a technical perspective, the drop was necessary and healthy as it brought the Nasdaq’s 14-day relative strength index (RSI) away from severely overbought levels. And such a move shouldn’t come as a surprise.

"Perhaps market participants are rebalancing or simply profit-taking ahead of the Labour Day weekend. How stock markets perform once trading resumes next week may be more indicative of whether a trend is truly forming."

On the data front, Markit’s UK construction PMI for August is due at 0930 BST. In the US, the non-farm payrolls report, unemployment rate and average earnings are out at 1330 BST.

Richard Hunter, head of markets at Interactive Investor, said: "If the US economic recovery is running into some resistance, the non-farm payrolls figure later today should provide some further colour.

"The consensus is that some 1.3 million new jobs will be confirmed, as compared to the figure of 1.8 million reported for July, which itself was ahead of expectations. Should consensus not be met, it is likely that calls for further fiscal stimulus from the US government will intensify, although any such stimulus is now becoming politically charged as the Presidential election campaign gathers pace."

In equity markets, housebuilders were under the cosh after the UK's competition regulator said it was taking enforcement action against four of the biggest housebuilders over their treatment of leasehold homeowners.

The Competition and Markets Authority has opened cases on Barratt, Countryside, Persimmon and Taylor Wimpey. It said the companies may have imposed unfair terms on leaseholders and misled buyers.

Berkeley Group was also down on the news, even as it maintained full-year guidance and reported better-than-expected production levels due to pent-up demand after the easing of coronavirus lockdown measures.

Market Movers

FTSE 100 (UKX) 5,829.37 -0.37%
FTSE 250 (MCX) 17,454.11 -0.03%
techMARK (TASX) 3,744.72 -0.45%

FTSE 100 - Risers

ITV (ITV) 63.66p 2.68%
Whitbread (WTB) 2,545.00p 1.80%
International Consolidated Airlines Group SA (CDI) (IAG) 219.50p 1.71%
Rolls-Royce Holdings (RR.) 221.30p 1.37%
NATWEST GROUP PLC ORD 100P (NWG) 106.40p 1.33%
Fresnillo (FRES) 1,266.00p 1.24%
Polymetal International (POLY) 1,932.50p 0.86%
Lloyds Banking Group (LLOY) 27.11p 0.86%
M&G (MNG) 160.20p 0.85%
Evraz (EVR) 321.70p 0.85%

FTSE 100 - Fallers

Barratt Developments (BDEV) 521.00p -3.41%
Scottish Mortgage Inv Trust (SMT) 880.50p -2.98%
Persimmon (PSN) 2,576.00p -2.46%
SEGRO (SGRO) 929.00p -1.63%
Smiths Group (SMIN) 1,389.00p -1.63%
Experian (EXPN) 2,699.00p -1.60%
Aveva Group (AVV) 4,807.00p -1.54%
Prudential (PRU) 1,146.00p -1.42%
Intertek Group (ITRK) 5,816.00p -1.39%
Ashtead Group (AHT) 2,518.00p -1.37%

FTSE 250 - Risers

Rank Group (RNK) 140.00p 5.42%
Sirius Real Estate Ltd. (SRE) 77.00p 4.62%
Network International Holdings (NETW) 397.20p 3.06%
Petrofac Ltd. (PFC) 156.10p 2.70%
IntegraFin Holding (IHP) 519.00p 2.57%
Chemring Group (CHG) 248.50p 2.26%
Virgin Money UK (VMUK) 89.68p 2.12%
TUI AG Reg Shs (DI) (TUI) 347.20p 2.12%
Airtel Africa (AAF) 59.60p 2.05%
Carnival (CCL) 1,114.50p 1.92%

FTSE 250 - Fallers

Hammerson (HMSO) 270.05p -6.00%
Polar Capital Technology Trust (PCT) 2,115.00p -2.31%
Edinburgh Worldwide Inv Trust (EWI) 266.50p -2.20%
Shaftesbury (SHB) 523.00p -2.15%
Crest Nicholson Holdings (CRST) 190.90p -1.85%
Herald Investment Trust (HRI) 1,650.00p -1.79%
Wetherspoon (J.D.) (JDW) 1,027.00p -1.72%
Big Yellow Group (BYG) 1,051.00p -1.68%
Lancashire Holdings Limited (LRE) 738.50p -1.66%
Domino's Pizza Group (DOM) 343.40p -1.60%