Feeding on the Fed: FTSE 100 slims down on prospect of US interest rate hike
Traders have been feeding on the Fed for the best part of 24 hours now, as they chew through a tasty release from the world's most important central bank.
Depending on what you'd ordered, the Federal Open Market Committee (FOMC) either left a sour taste in the mouth or delivered some unexpected goodies.
Equities and commodities traders, with a few notable exceptions, were left reaching for the mouthwash, while those on the fixed income and currencies lapped up the news that the Fed has put a June rate hike firmly on the table.
The FTSE 100 lost 1.8 per cent to crash down to 6,053.35 today, while the German Dax was off 1.3 per cent at 9,814.09. The Cac 40 in Paris fared a little better, but still dropped 0.7 per cent to 4,289.63.
[stockChart code="UKX" date="2016-05-19 16:48"]
In the States, shares plummeted to a six-week low after the meatier-than-expected minutes landed at 7pm last night.
The Dow Jones stood at 17,346.31 in afternoon trading – down another one per cent for the day and well off the 18,000 barrier it stormed through just weeks ago. The S&P 500 lost 0.9 per cent and the Nasdaq was off by 1.1 per cent.
Read more: What you need to know before the US market open
After a tasty start, UK banks also lost early gains to post a so-so day. Higher interest rates are supposed to be good news for them, but after tucking into an early buying spree, traders called for the bill a little earlier than the city may have liked.
On the currencies desks, traders decided they'd had their fill of dollars yesterday evening with the currency largely unchanged on the day, despite some ups-and-downs.
A pound would get you $1.4589 this afternoon, while the euro was swapping hands for $1.1206, both 0.1 per cent less than last night.