Reuters, London :
Britain’s top share index fell sharply on Friday after the U.S. Federal Reserve left interest rates unchanged on concerns about the health of the global economy.
Recent financial market volatility and disappointing inflation data contributed to the Fed’s decision to hold rates steady, but the committee maintained its bias towards a rate hike sometime this year, while lowering its long-term outlook for the economy.
“Markets have increasingly become worried about the sustainability of global growth and the Federal Reserve’s reluctance to raise interest rates fuels those concerns,” Robert Parkes, equity strategist at HSBC, said.
“The Fed’s assessment of the global economic conditions has made investors nervous as uncertainty about the timing of a U.S. rate hike continues. We think that a rate hike could still be announced in December.”
The blue-chip FTSE 100 index .FTSE fell 1 percent to 6,126.45 points by 1045 GMT. The benchmark index is down nearly 7 percent so far this year.
“Markets have taken cues from the U.S., but uncertainty prevails and choppiness is the only certain result. Deflation is a concern. China is a concern, and oil prices look set to take another leg lower,” Brenda Kelly, head analyst at London Capital Group, said.
The UK oil and gas index .FTNMX0530 fell 1.6 percent, tracking weaker crude oil prices. Commodities trader and miner Glencore (GLEN.L) led the fallers, down 4.6 percent and trading near a record low after trade bodies raised questions about its recent $2.5 billion equity placing.
On the positive side, some precious metal mining companies surged on expectations that the Fed’s move to hold U.S. interest rates would keep the dollar under pressure and lift gold prices.
Shares in miners Randgold Resources (RRS.L) and Fresnillo (FRES.L) rose 4.4 percent and 5.1 percent respectively.
In the mid-caps, healthcare services provider UDG Healthcare (UDG.L) rose 6.6 percent after McKesson Corporation (MCK.N) agreed to buy its pharmaceutical distribution division.
Britain’s top share index fell sharply on Friday after the U.S. Federal Reserve left interest rates unchanged on concerns about the health of the global economy.
Recent financial market volatility and disappointing inflation data contributed to the Fed’s decision to hold rates steady, but the committee maintained its bias towards a rate hike sometime this year, while lowering its long-term outlook for the economy.
“Markets have increasingly become worried about the sustainability of global growth and the Federal Reserve’s reluctance to raise interest rates fuels those concerns,” Robert Parkes, equity strategist at HSBC, said.
“The Fed’s assessment of the global economic conditions has made investors nervous as uncertainty about the timing of a U.S. rate hike continues. We think that a rate hike could still be announced in December.”
The blue-chip FTSE 100 index .FTSE fell 1 percent to 6,126.45 points by 1045 GMT. The benchmark index is down nearly 7 percent so far this year.
“Markets have taken cues from the U.S., but uncertainty prevails and choppiness is the only certain result. Deflation is a concern. China is a concern, and oil prices look set to take another leg lower,” Brenda Kelly, head analyst at London Capital Group, said.
The UK oil and gas index .FTNMX0530 fell 1.6 percent, tracking weaker crude oil prices. Commodities trader and miner Glencore (GLEN.L) led the fallers, down 4.6 percent and trading near a record low after trade bodies raised questions about its recent $2.5 billion equity placing.
On the positive side, some precious metal mining companies surged on expectations that the Fed’s move to hold U.S. interest rates would keep the dollar under pressure and lift gold prices.
Shares in miners Randgold Resources (RRS.L) and Fresnillo (FRES.L) rose 4.4 percent and 5.1 percent respectively.
In the mid-caps, healthcare services provider UDG Healthcare (UDG.L) rose 6.6 percent after McKesson Corporation (MCK.N) agreed to buy its pharmaceutical distribution division.
