FTSE 100 Tumbles as Fed Minutes Spook Investors
In mid-morning trading, the FTSE 100 is under heavy selling pressure, with the 6300 level looking shaky, as uncertainty from last night’s Fed minutes spooks investors.
The roar of the bears can be heard across the City of London this morning, and given the pounding they have taken so far in 2013 one can forgive them their brief period of rejoicing.
We are not yet halfway through the day and already we are nearing triple-digit losses for London’s leading index.
The spark was a set of Fed minutes that continued the trend of diminished dovishness; this has prompted concerns that Ben Bernanke and co have lost some of their previously insatiable appetite for policy easing.
Combine this with new-found concerns about the looming Italian elections and a nicely-timed slew of weak Eurozone economic data and you have an excellent cocktail to boost risk aversion.
Such limited sunshine as is available is being provided by BAE Systems, which has boosted its dividend and reported an increased backlog in orders.
The outlook for 2013 does remain cautious however, a common stance among companies at present.
Looking to this afternoon, there is a barrage of US economic data to keep investors busy, with bulls hoping that some good news can be found amid the carnage in stock markets.
Ahead of the open we expect the Dow Jones to begin 55 points lower around 13,870.
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Financial Market Comments from Chris Beauchamp, Market Analyst, IG Index.
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