FTSE declines as sentiment takes a hit on global scale
The FTSE 100 declined by 139.27 points, or 2%, today, closing at 6419.31. The declines came on the back of a bad day of trading in Asia, where the Nikkei declined by 3.8%, and further concerns in the US that the flow of money currently being injected into the worlds largest economy may soon come to an abrupt halt.
The Federal Reserve board is due to meet on the 18th and 19th of this month, where it is expected that tapering of the current monetary easing will be high on the agenda. Today the President of the Kansas City Federal Reserve, Esther George, who has been a long time opponent of the current policy, once again put further question marks over the likelihood of an extended period of quantitative easing.
She said “A slowing in the pace of purchases could be viewed as applying less pressure to the gas pedal, rather than stepping on the brake. Adjustments today can take a measured pace as the economy’s progress unfolds” and later added “As a result, several sectors in the economy are becoming increasingly dependent on near-zero short term interest rates and quantitative easing policies”. With the Federal Reserve alreading considering a slowdown of their injections into the economy, George’s comments hit sentiment worldwide.
Very little happened for investors to zone in on, so they were once again left to trade based on a broad view of the economic climate. One of the few points of interest was an announcement from Tesco PLC, announcing that they had fallen short of their forecast for the quarter. This lead the food retailer to a decline of 18.85p to 345p.
Aberdeen Asset Management continued their recent trend of declines after Anne Richards, one of the company’s directors, sold shares to the value of £6m. Their stock fell to 437p, a decline of 26p.