London close: Remarks from Fed officials help steady nervous investors

16th Oct 2014 16:37

Thursday's session closed with modest losses as equities tried to recover from the previous day's spike in volatility, amid continuing concerns surrounding the financial stability of Greece and more bad news for blue chip pharmaceutical Shire.After dropping early on and remaining low for much of the day, the FTSE 100 made something of a recovery to end just 15.73 points lower at 6,195.91.IG market analyst Alastair McCaig said: "Equity markets have struggled for any sense of perspective as both comments from economists and economic data have offered already jittery investors yet more reason to panic. The VIX fear index continues to bubble around year highs, and the FTSE has now seen gains acquired from back in June 2013 wiped out."Once again conversations around equity trading floors are focused on the sovereign debt market as Greek 10-year debt hits yields of 9%, well above the 7% danger level. Market commentators will once again be dusting off their 'Greek Tragedy' quotes as this move looks anything but a short-term blip."Yields on 10-year Greek government bonds surged in late morning trading after officials on Tuesday evening proposed an early exit to the country's international bail-out programme.The jump sparked concerns about the ability of Greek banks to self-fund without the support of the European Central Bank. There are also fears that Athens might be attempting to lay the groundwork before backtracking on its commitments to economic reforms."Markets are becoming increasingly concerned that the country's desire to exit its bailout program early could mean that they are more likely to deviate from the reform programme set out by the International Monetary Fund," explained CMC chief market analyst Michael Hewson.US initial jobless claims fallUS markets were knocked lower after initial jobless claims fell to 264,000 in the week ended 11 October, below consensus expectations for 290,000 and the lowest level since April 2000.Claims for the week ended 4 October were unrevised at 287,000, while the four-week moving average of initial claims declined to 284,000 from a level of 288,000 the prior week. Continuing claims for the week ended 4 October rose slightly to 2.39m from an upwardly revised 2.38m, though the four-week moving average of continuing claims continued to decline to 2.40m."The low level of jobless claims reflects continued improvement in labour markets, which we expect will continue to drive the unemployment rate lower to 5.8% by the end of this year," Barclays said in a note to investors.Extreme positioning in US dollars and a lack of clarity around the Federal Reserve's communications were cited by some observers as additional factors which may have accentuated the recent volatility.Verbal intervention from the FedHelping to steady investors' nerves were reports that behind closed doors Fed chair Janet Yellen last weekend expressed confidence in the underlying robustness of the US recovery. In parallel, on Thursday afternoon James Bullard, the president of the Federal Reserve bank of St.Louis, said the central bank should consider postponing the end of QE.Shire slides after Abbvie makes u-turn on takeover dealShire, which dropped 22% on Wednesday after Abbvie said it was reconsidering its bid for the firm, was down a further 8% after the US group advised shareholders vote against the takeover due to changes in the US tax law. Abbvie said that these changes had introduced "an unacceptable level of uncertainty" to the deal.Banking peers RBS, Barclays, Lloyds, HSBC and Standard Chartered were also weighing on the blue-chip index.British Sky Broadcasting Group failed to impress despite revealing that it had made a strong start to the year, with profits ahead of expectations in the first quarter as subscriptions surged.International distribution and outsourcing firm Bunzl climbed after it said third quarter revenue increased 6% year-on-year on a constant exchange rate basis as acquisitions came on stream.On the second tier, gaming giant Bwin.party rose after it reported a 2% rise in third quarter revenue to €148.7m as an increase in sports betting sales offset a fall in bingo, casino and poker. Sports betting revenue advanced 11% to €58.8m, driven by higher margins, the World Cup and growth in the number of people using their mobile phones to gamble.On the downside, Enquest and Afren continued to slide after UBS AG said both had more exposure to falling crude prices than some of their sector peers.Market MoverstechMARK 2,585.08 -0.07%FTSE 100 6,195.91 -0.25%FTSE 250 14,480.09 +0.37%FTSE 100 - RisersInternational Consolidated Airlines Group SA (CDI) (IAG) 343.00p +4.54%Bunzl (BNZL) 1,584.00p +4.28%GKN (GKN) 299.60p +4.17%Marks & Spencer Group (MKS) 405.50p +4.05%ARM Holdings (ARM) 862.50p +3.79%easyJet (EZJ) 1,403.00p +3.77%Sainsbury (J) (SBRY) 233.00p +3.37%Ashtead Group (AHT) 923.00p +3.36%ITV (ITV) 199.90p +3.09%Meggitt (MGGT) 436.50p +2.97%FTSE 100 - FallersShire Plc (SHP) 3,718.00p -7.33%Royal Dutch Shell 'A' (RDSA) 2,066.00p -2.27%Aviva (AV.) 476.10p -2.18%Tullow Oil (TLW) 483.90p -2.08%RSA Insurance Group (RSA) 447.90p -2.03%Barclays (BARC) 207.90p -2.03%St James's Place (STJ) 648.00p -1.89%Royal Dutch Shell 'B' (RDSB) 2,160.00p -1.75%Smith & Nephew (SN.) 906.00p -1.68%Tesco (TSCO) 172.00p -1.66%FTSE 250 - RisersBwin.party Digital Entertainment (BPTY) 88.10p +6.66%AO World (AO.) 178.70p +6.56%WH Smith (SMWH) 1,050.00p +5.47%Brown (N.) Group (BWNG) 308.00p +3.67%Fidessa Group (FDSA) 2,188.00p +3.65%Rightmove (RMV) 2,066.00p +3.46%Booker Group (BOK) 121.40p +3.41%Greencore Group (GNC) 237.60p +3.26%Man Group (EMG) 111.70p +3.14%Ocado Group (OCDO) 227.40p +3.08%FTSE 250 - FallersEnQuest (ENQ) 72.70p -5.95%Afren (AFR) 93.25p -5.14%IP Group (IPO) 185.60p -4.77%Card Factory (CARD) 219.30p -4.65%Go-Ahead Group (GOG) 2,304.00p -4.64%Hochschild Mining (HOC) 120.50p -3.60%Petra Diamonds Ltd.(DI) (PDL) 172.90p -3.46%Fisher (James) & Sons (FSJ) 1,116.00p -3.38%Premier Oil (PMO) 252.00p -3.30%PayPoint (PAY) 890.00p -3.26%