FTSE reverses gains as US concerns dominate

Thu, 9th May 2013

The top share index in the UK fell sharply on Wednesday as investors absorbed disappointing figures from the US whilst waiting for a decision from the Federal Reserve about their quantitative easing programme. By the end of the midweek session, the FTSE 100 was lower by 0.33 per cent closing at 6451.

The pending announcement from the Federal Reserve left the market in a cautious mood as investors waited to see if the quantitative easing programme would remain in place as widely expected. There had been indications that it would begin to be tapered off but recent economic data has been poorer than anticipated.

Supporting the case for the stimulus being left unchanged was the ADP employment report released during the afternoon session which saw the private sector create far fewer jobs than predicted. Private payrolls increased by just 119,000 compared to the 150,000 which had been expected and was even down on the previous month's tally of 131,000.

Trading volumes were particularly low with many markets across the continent remaining shut for the May Day Bank Holiday.

Back in London, telecommunications giant BT Group were riding high on top of the leaderboard with an increase of 3.44 per cent. Shares in the company shot upwards after BT announced a tie-up deal for 10 years with mobile provider O2 in order to create a powerful 4G network for customers. This new network is estimated to be worth in the region of £500 million.

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