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FTSE sheds 2% as Fed uncertainty persists


The FTSE 100 was down by 1.99 per cent today after investors took profits following the strong bounce seen in the previous session.

Wednesday ended with the FTSE 100 down 134.84 points to 6,627.17, while the FTSE All-Share dropped 67.92 points, or 1.91 per cent, to 3,494.74. Yesterday, the FTSE 100 climbed 107.67 points after officials from the European Central Bank and the Bank of Japan pledged their support to easy monetary policy.

National Grid was the strongest faller in London today, dropping 5 per cent to 797p, followed by United Utilities, Aberdeen Asset Management, SSE and Centrica.

The index is still 22.93 per cent up over the past year.

There was no major news from UK companies or economic data for investors to consider in today’s session, which may have led some to lock in profits amid the continued uncertainty over the Federal Reserve’s quantitative easing programme.

A broad sell-off in equity markets was prompted last week after Fed chairman Ben Bernanke suggested the central bank could consider slowing the pace of its $85bn-a-month bond-buying scheme at the coming few monetary policy meetings.

Interactive Investor head of derivatives Mike McCudden told Reuters: “Underlying fundamentals may still point to more upward momentum in the FTSE, but with investor nervousness about the Fed having a rethink on QE and some month-end profit-taking on the back of sharp rises, we are no doubt in for a volatile few days.”


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