FTSE falls under speculation over US rates
Uncertainty about the direction of US interest rates sent a chill wind blowing through the London markets today.
Contradictory comments about whether a run of US rate rises had ended helped to drag the FTSE 100 Index 15.9 points lower to 5009.3 by mid-morning.
Federal Reserve chairman Alan Greenspan triggered a 110-point rally in the Dow Jones Industrial Average yesterday by hinting that the Fed was unlikely to hike rates further this year.
But confusion set in after another member of the Fed made comments that appeared to contradict Mr Greenspan’s view, leaving the Dow only 16 points ahead by the bell.
Jimmy Yates, a trader at City broker deal4free.com, said: “Uncertainty is the key word today – we need some more guidance from the Fed at the moment.”
Back in London, supermarket group Morrisons was helping to drag the market lower after estimating annual underlying profits would be between £50 million and £150 million – well below the equivalent £320 million figure posted last year.
The group was fifth in the Footsie fallers, losing nearly 2% or 3.25p to 183.5p.
Fellow retailer Kingfisher joined it on the way down, weakening 5.5p to 253.5p, after the boss of US DIY group Home Depot said it was not looking to buy the UK owner of B&Q.
The biggest top flight losers were firms going ex-dividend, meaning new investors are no longer entitled to receive the latest dividends. United Utilities weakened more than 4%, off 23.5p to 655.5p, while National Grid Transco lost 18p to 532.75p.
Royal Bank of Scotland was at the top of the Footsie risers despite reporting rises in credit card arrears. Shares lifted 26p to 1663p as the group also said it had continued to perform well in the first half of 2005.
Elsewhere, Northumbrian Water topped the FTSE 250 risers after announcing a sharp hike in profits and a positive commitment to future dividends. The stock cheered 8p to an all-time high of 205p.
