London pre-open: Stocks seen lower after US selloff

4th Sep 2024 07:33

(Sharecast News) - London stocks were set to fall at the open on Wednesday following a heavy selloff on Wall Street on the back of poor manufacturing data.

The FTSE 100 was called to open down around 90 points.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "September began on an ugly note, to say the least. The US equities tumbled after the latest ISM data showed a fifth month of contraction in the US manufacturing, and at accelerated pace. The latter revived the recession worries ahead of this week's critical US jobs data, and sent the S&P500 more than 2% down. This was the worst selloff since August 5, when a weak jobs data from the US had boosted the recession worries, the expectation of a 50bp cut from the Federal Reserve (Fed) and resulted in an almost 10% selloff of the S&P500.

"The technology stocks led losses, yesterday. Nasdaq 100 dived more than 3%, as Nvidia tumbled nearly 10% as part of the broader macroeconomic worries and suspected AI fatigue, and another 2.42% in the afterhours trading on news that the DoJ sent subpoenas to the company because it suspects that Nvidia violated antitrust laws, made switching harder to other chipmakers and penalized companies that didn't use Nvidia's AI chips exclusively."

In UK corporate news, housebuilder Barratt reported a sharp fall in annual profit, citing cost-of-living pressures, higher mortgage rates and limited consumer confidence.

The company said pre-tax profit slumped to £170.5m from £705m, with completions down 18.6% to 14,000.

Hilton Foods reported a 3.2% increase in volume and a 1% rise in revenue on a like-for-like basis for the first half, although statutory revenue declined by 8.4%.

Adjusted operating profit grew 23.2% on a like-for-like basis, supported by strong free cash flow and a reduction in net bank debt.

The FTSE 250 company said it continued to experience strong retail volume growth, particularly in its core meat and seafood categories, and remained on track with expansion plans while maintaining a solid financial position for the full year.