London open: FTSE nudges down as housebuilders slide

London stocks nudged lower in early trade on Monday, with housebuilders under the cosh.

At 0840 GMT, the FTSE 100 was down 0.1% at 7,481.30.

Richard Hunter, head of markets at Interactive Investor, said: "The initial exuberance of the New Year was soon replaced by a more wary outlook, as the impact of earlier than expected rate hikes were being priced in.

"The non-farm payrolls figure was much lighter than expected, coming in at 199000 jobs added versus a consensus of 400000, suggesting a lack of available workers. That being said, over the course of last year around 6.5 million jobs were added, and unemployment now stands at 3.9%. This would tend to play into the Federal Reserve’s more recent view that full employment may already have been reached, which in turn could lead to wage pressure.

"This additional inflationary factor points to the Fed sticking to a course of monetary tightening, which now seems likely to lead to an initial rate hike in March."

Hunter said the UK’s premier index was "cautiously bucking the trend" in the early part of the year, having so far added 1.3%.

"Perhaps less impacted by rate hike timing concerns as evidenced in the US, the index is rather being bolstered by the nature of its constituents. An initial 5% hike in the oil price has lifted the majors, with Shell regaining its place as the largest FTSE 100 company by capitalisation.

"The banks are also being boosted on the possibility of a rising interest rate environment. Equally, the sector has more recently come into vogue on valuation grounds, with investors considering the banks to be sitting on relatively cheap valuations, and with the currently preferred picks being Barclays and Lloyds."

In equity markets, housebuilders slumped on news the government will seek an extra £4bn from property developers to fund cladding repairs on low-rise flats. Persimmon, Berkeley, Barratt, Taylor Wimpey, Bellway, Countryside, Vistry, Crest Nicholson and Redrow all fell.

On the upside, Coca-Cola HBC was the standout gainer on the FTSE 100, boosted by an upgrade to ‘buy’ at Bank of America Merrill Lynch.

ITV also rose after an upgrade to ‘outperform’ at Exane, while Tate & Lyle benefited from the same rating upgrade.

Plus500 rallied after saying it had delivered an "outstanding" operational and financial performance throughout FY2021, ahead of market expectations.

Market Movers

FTSE 100 (UKX) 7,481.30 -0.05%
FTSE 250 (MCX) 23,329.45 -0.10%
techMARK (TASX) 4,486.90 0.01%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 2,664.00p 1.91%
International Consolidated Airlines Group SA (CDI) (IAG) 163.90p 1.79%
Rolls-Royce Holdings (RR.) 129.06p 1.51%
Vodafone Group (VOD) 116.24p 1.43%
ITV (ITV) 115.90p 1.40%
Associated British Foods (ABF) 2,073.00p 1.07%
Abrdn (ABDN) 245.80p 1.07%
Standard Chartered (STAN) 491.70p 0.97%
BAE Systems (BA.) 563.80p 0.93%
Sainsbury (J) (SBRY) 277.40p 0.80%

FTSE 100 - Fallers

Persimmon (PSN) 2,723.00p -2.54%
Barratt Developments (BDEV) 717.60p -2.42%
Berkeley Group Holdings (The) (BKG) 4,660.00p -2.16%
Taylor Wimpey (TW.) 169.35p -2.08%
Experian (EXPN) 3,346.00p -1.99%
Croda International (CRDA) 9,282.00p -1.86%
Ocado Group (OCDO) 1,534.50p -1.63%
SEGRO (SGRO) 1,324.50p -1.38%
Ferguson (FERG) 12,675.00p -1.29%
Spirax-Sarco Engineering (SPX) 15,015.00p -1.28%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,595.00p 4.22%
Cineworld Group (CINE) 38.35p 3.34%
Plus500 Ltd (DI) (PLUS) 1,482.50p 3.17%
Tate & Lyle (TATE) 701.00p 2.91%
easyJet (EZJ) 639.00p 2.77%
Petropavlovsk (POG) 18.76p 2.68%
CMC Markets (CMCX) 255.00p 2.00%
Wizz Air Holdings (WIZZ) 4,785.00p 1.79%
Weir Group (WEIR) 1,793.50p 1.61%
TUI AG Reg Shs (DI) (TUI) 262.90p 1.54%

FTSE 250 - Fallers

Contour Global (GLO) 185.00p -2.94%
Rank Group (RNK) 152.00p -2.56%
Future (FUTR) 3,472.00p -2.42%
Bellway (BWY) 3,156.00p -2.32%
Countryside Properties (CSP) 435.60p -2.02%
Redrow (RDW) 672.40p -1.98%
Kainos Group (KNOS) 1,667.00p -1.94%
Vistry Group (VTY) 1,166.00p -1.93%
Sirius Real Estate Ltd. (SRE) 138.40p -1.70%
Safestore Holdings (SAFE) 1,362.00p -1.59%