London pre-open: Stocks to fall after US tech selloff

(Sharecast News) - London stocks were set to fall again at the open on Friday following a technology-led selloff on Wall Street, as investors eyed the latest US non-farm payrolls report.
The FTSE 100 was called to open 33 points lower at 5,817

CMC Markets analyst David Madden said: "The brutal decline in US tech stocks yesterday sparked a wave of selling in Europe and the US. It really was a day of two halves as sentiment in Europe was initially bullish on account of the optimism surrounding the health crisis and the news about the French €100 billion relief package.

"Not long after the start of trading in the US, there was intense selling pressure in the much-talked about tech sector. The fast move to the downside in US indices dragged their European counterparts into the red.

"Recently, the NADSAQ 100 has powered ahead as big name companies like Apple, Netflix, Amazon, Alphabet, Microsoft and Tesla have been in extremely high demand. There has been talk of gross overvaluations for some time, and yesterday there was a big sell-off in the stocks. Panic selling set in and equities across the board suffered as a result. In the end, the Nasdaq 100 finished down more than 5%, and the S&P 500 lost 3.5%."

On the data front, Markit's 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.

In corporate news, house builder Berkeley maintained full year guidance as it reported better-than-expected production levels due to pent-up demand after the easing of coronavirus lockdown measures.

The company said it anticipated a more even split of profit between the first and second halves of the year and held its existing £500m pre-tax profit forecast and commitment to return £280m a year to shareholders.

However, Berkeley also sounded a note of caution over current volatility and risks from the longer term economic impact of Covid-19, including once current government support tapers and the possibility of a severe second wave of the virus.

"We are also conscious of the risks around the UK's departure from the European Union at the end of 2020," it added.

Centrica's British Gas business has bought the customers of Robin Hood Energy, a loss-making supplier set up by Nottingham City Council to compete with big energy providers.

British Gas will take on 112,000 residential customers and 2,600 business customers from Robin Hood for an undisclosed sum.