The first interest rate hurdle of the week was successfully cleared but that failed to inspire the London market, with all the leading indices losing ground.
The US Federal Reserve kept interest rates on hold on Tuesday, a decision that was widely expected. But the Fed maintained its tightening bias, despite some hopes it would move to a neutral stance. The Bank of England and the European Central Bank announce rate decisions today.
But London rarely looked as if it was going to end the day in positive territory. The Nasdaq Composite's third consecutive triple digit loss weighed heavily on technology stocks from the opening. The Nasdaq fell again in early New York trading yesterday before mounting a partial recovery while the London session was winding down.
London's Nasdaq equivalent - the Techmark 100 index - ended with its own triple digit decline, dropping 104.5 to 3,741.56, leaving it around 2,000 points below its March high. The other TMTs - telecom, tech and media stocks - were also weaker with Vodafone losing ground despite better-than-expected third quarter subscriber numbers and the purchase of a strategic stake in China Mobile. The other index losses were more subdued. The FTSE 100 closed down 10.1 at 6,334.9, having been 61.2 off at its worst. The FTSE 250 fell 32.8 to 6,660.9 while the SmallCap dropped 19.3 to 3,380.4.
The day's domestic economic data was distinctly mixed. The purchasing managers' index for the service sector fell to 55.0, its lowest level since March last year. But the indices of both the cost of raw materials and the prices charged rose sharply, the latter reaching its highest level since the data was first compiled in 1996.
The Confederation of British Industry survey of the retail sector also pointed to a slowdown, with sales growing at their slowest rate for 17 months. But in sharp contrast, the Halifax's survey of house prices showed an unexpected 1.6 per cent jump in September, taking the annual gain to 9.2 per cent.
The data was not seen as likely to make a decisive difference to the decision of the Bank of England's Monetary Policy Committee, which should be announced at noon. Most analysts expect interest rates to be left unchanged. The European Central Bank is also expected to leave rates unchanged although opinion among analysts is more mixed.
Turnover was 1.73 billion shares by the 6 p.m. count, continuing the rather sluggish tone of the week.
