FTSE 100 backtracks from record high as housebuilders slip
By the end of the day, London’s top index had declined by 65.09 points, or 0.82%, to 7,836.71p.
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The FTSE 100 fell back from Friday’s record high in a dent for the recent recovery in trading sentiment.
Surging US jobs figures from Friday and a hawkish speech by Bank of England rate-setter Catherine Mann indicated that there is still room for further interest rate increases.
London stocks slid on Monday as a result, with housebuilders among those falling after PMI construction figures showed the weakest sector performance for almost three years.
By the end of the day, London’s top index had declined by 65.09 points, or 0.82%, to 7,836.71p.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have taken a step back today as the aftermath of Friday’s bumper US payrolls continues to reverberate through the market.
“The FTSE 100, having hit a new record high last week, has slipped back, along with the rest of Europe’s markets, as yields continue to rise, building on the surge we saw on Friday.
“External monetary policy committee member Catherine Mann, who is the main hawk on the Bank of England rate-setting committee, has added to the upward pressure on bond yields by saying that rates in the UK will have to continue to rise, and that it is better to lean towards over-tightening than being cautious.”
Weakness early doors from the Asian market, particularly among technology and property stocks, leaked immediately into trading sentiment across Europe.
The Dax closed down 0.84% and France’s Cac 40 fell by 1.34% by the close.
In the US, the main markets picked up where they left off on Friday to drop in the face of rising yields.
Meanwhile, sterling hit its lowest against the dollar for a month after the US greenback continued to see the benefits of the bumper payroll report.
The pound was down 0.39% against the dollar at 1.200 and was 0.34% higher against the euro at 1.120 at the close.
In company news, Superdry moved higher after founder and chief executive Julian Dunkerton upped his stake in the fashion retailer, despite denying reports that he is planning to take the company private just days earlier.
The group said Mr Dunkerton has increased his stake in the company to 24.3% from 23.9%. As a result, shares in the business improved by 2.4p to 123.4p.
Elsewhere in retail, investors were less positive about Frasers after reports the Sports Direct parent firm could buy two UK shopping centres for around £100 million.
The Sunday Times reported that the Mike Ashley-founded operation is in advanced talks to buy The Mall in Luton and is also considering a deal for the Overgate centre in Dundee.
Frasers shares moved 9.5p lower to 793.5p on Monday.
The price of oil rebounded from its lowest levels in three weeks amid concerns about how the earthquake in Turkey could impact nearby oil terminals.
Brent crude oil increased by 0.85% to 80.62 US dollars (£67.14) per barrel when the London markets closed.
The biggest risers on the FTSE 100 were Airtel Africa, up 4p at 117.4p, Centrica, up 1.7p at 96.96p, GSK, up 21.4p at 1,461p, Fresnillo, up 10.6p at 827.4p, and National Grid, up 6p at 1,040p.
The biggest fallers of the session were Prudential, down 64.5p at 1,289.5p, Ocado Group, down 24.8p at 713.8p, Hargreaves Lansdown, down 31.2p at 918.4p, BT, down 4.3p at 130.35p, and Land Securities, down 20.6p at 721.2p.