European stock indices including Britain’s FTSE let slip of some of yesterday’s strong gains as investors fixated on the US Fed’s decision on the fate of its massive stimulus scheme.
European markets surged yesterday, as investors seemingly start appreciating good economic data on its own merits, rather than worrying about its impact on monetary stimulus.
But Monday’s strength wasn’t sustained this morning, as the FTSE 100 fell 0.5% to 6,490, led lower by mining shares including Anglo American, Vedanta and Fresnillo.
The beginning of the end of the US Federal Reserve’s bond buying scheme remains a worry; angst about the removal of the support is at least partly behind a 2% decline on the FTSE 100 over the past three months.
The Fed’s FOMC panel begins a two day meeting today which could result in the ‘tapering’ back of the $85 billion monthly bond buying scheme. The majority of economists polled by Reuters don’t expect this to happen until March though, under new Fed chief Janet Yellen.
Economic events are taking precedence this week, the last full trading week of 2013, with no UK blue chips due to deliver financial updates.
Among big movers in London though RSA Insurance clawed back some of its recent losses, up 1.6% to 91p as bargain hunters snapped up the hard-hit stock.