By Shashwat Awasthi
(Reuters) - Britain's main index inched lower on Friday as heavyweight miners fell due to weakness in China's iron ore futures and homebuilder shares slipped following a weak trading update from building supplier SIG.
The FTSE 100 (FTSE) shed 0.2% and a slide in SIG (L:SHI) led the FTSE 250 (FTMC) 0.2% lower by 0747 GMT. John Menzies tanked after a profit warning, weighing on the small-cap index (FTSC).
An index of miners (FTNMX8350) slipped for the third straight day after China's leading steel companies formed a group to probe whether "non-market factors" were causing a record surge in iron ore prices.
In the broader market, investors returning after a U.S. market holiday stayed cautious in anticipation of U.S. non-farm payrolls data, which would provide clear indications on whether or not the Federal Reserve would cut interest rates.
"U.S. payrolls report has the potential to upset the applecart when it comes to whether or not we can expect to see a Fed rate cut later this month," CMC Markets analyst Michael Hewson said.
Spredex analyst Connor Campbell said that "though many believe a Fed rate cut in July is already locked on, Friday's jobs data could help sway the central bank in terms of the size of the slash."
SIG tumbled nearly 9% as it posted lower like-for-like sales for the first half of the year and flagged a "marked deterioration" in UK construction activity this year.
The dour outlook weighed on the shares of homebuilders. Persimmon (L:PSN), which had in the previous session forecast a drop in revenue as it slowed new home releases, fell 2%. Peers Taylor Wimpey (L:TW) and Barratt (L:BDEV) also skidded.
Housebuilders, considered among stocks that most closely track the state of the UK economy, were also pressured after a survey showed British businesses had turned gloomier about the economy amid persisting Brexit worries.
Aviation servicing company John Menzies (L:MNZS) plummeted 16% to a more than 3-year low after it warned of lower annual profit, mainly due to weak cargo volumes and flight schedule reductions.