London close: Stocks fall as Fed speculation overshadows ECB euphoria

7th Nov 2013 16:31

- ECB cuts main policy rate- US GDP picked up in Q3, eyes turn to jobs data- Randgold jumps after Q3 resultstechMARK 2,643.07 -0.40%FTSE 100 6,697.22 -0.66%FTSE 250 15,389.52 -0.09%As the initial euphoria following a rate cut in Europe faded, UK stocks swung sharply into the red on Thursday on concerns that a pick-up in US economic growth could prompt the Federal Reserve to scale back stimulus.The FTSE 100 was 44.47 points lower at 6,697.22 by the close, well below its intraday high of 6,773 reached after the European Central Bank (ECB) decision.The ECB cut its main policy rate by 25 basis points (bp) to an all-time low of 0.25% in a move which some analysts said was widely priced in following the steep drop in Eurozone inflation revealed last week. It also cut its emergency borrowing rate from by 25bp to 0.75% but held the deposit rate at zero.The move initially prompted markets across Europe to push into positive territory, though the bullish mood was quickly overshadowed by a sharp acceleration in US gross domestic product revealed by the Congress Department this afternoon. It said the economy expanded at a 2.8% annual rate in the third quarter. While this smashed forecasts for 2% growth, the beat was entirely due to inventory accumulation, which contributed 80 basis points to growth. Nevertheless, Chief US Economist Paul Ashworth from Capital Economics said that the pick-up in growth will "increase speculation that the Fed will begin tapering its asset purchases in December". However he said that Friday's release of the October employment report will "probably more important for the policy outlook". At midday, the Monetary Policy Committee announced that it had voted to keep its Bank Rate at 0.5% and its asset purchase programme at £375bn in a move that was widely anticipated.Randgold bucks the trend as profits jumpGold producer Randgold Resources saw its share price surge this afternoon after it said quarter-on-quarter profit increased 80% following a strong performance by its flagship Loulo-Gounkoto complex in Mali. Investors were shrugging off the weakness seen across the wider mining sector with Vedanta, Anglo American, Glencore Xstrata and Fresnillo tracking metal prices lower.Mondi extended yesterday's losses, which came after it said that sales volumes in the third quarter were held back by planned maintenance shutdowns at some of its larger sites.Schroders fell as investors cashed in strong gains seen in the share price over the past year (around 65%). The company reported with a sharp rise in third-quarter profits today, but Canaccord Genuity was putting downwards pressure on the stock after downgrading it to 'hold', saying that the company needs to show "stronger growth to justify upgrades".Coca-Cola HBC, the world's second-largest bottler of Coca-Cola, rose despite recording a dip in revenues in the third quarter as volumes were hit by tough economic conditions in Europe.Meggitt was also rising as sentiment recovers following a forecast downgrade, which led to a sharp drop in the share price last week. A purchase by Chief Financial Officer Doug Webb of 15,000 shares helped move the share price in the right direction.Others in the aerospace and defence sector were also making gains today, including Rolls-Royce after winning a contract extension with the US Department of Defence and BAE Systems as investors continued to celebrate the company's restructuring plans announced yesterday.Auto and bike parts retailer Halfords surged after a better-than-expected increase in first-half profits following a strong Retail performance.FTSE 100 - RisersRandgold Resources Ltd. (RRS) 4,885.00p +6.08%Coca-Cola HBC AG (CDI) (CCH) 1,800.00p +2.51%Marks & Spencer Group (MKS) 508.50p +1.82%Rolls-Royce Holdings (RR.) 1,170.00p +1.74%Admiral Group (ADM) 1,288.00p +1.34%Bunzl (BNZL) 1,391.00p +1.24%BAE Systems (BA.) 460.20p +0.97%Meggitt (MGGT) 507.50p +0.79%GKN (GKN) 374.50p +0.75%British Land Co (BLND) 612.00p +0.74%FTSE 100 - FallersSchroders (SDR) 2,491.00p -4.38%Mondi (MNDI) 1,025.00p -4.21%Anglo American (AAL) 1,512.00p -2.80%Vedanta Resources (VED) 1,060.00p -2.66%Croda International (CRDA) 2,317.00p -2.65%Glencore Xstrata (GLEN) 333.00p -2.60%Travis Perkins (TPK) 1,759.00p -2.49%Aviva (AV.) 435.90p -2.11%Fresnillo (FRES) 970.00p -2.02%Royal Bank of Scotland Group (RBS) 321.80p -1.89%FTSE 250 - RisersHalfords Group (HFD) 478.00p +14.16%Beazley (BEZ) 239.90p +5.17%Centamin (DI) (CEY) 50.75p +5.07%Grainger (GRI) 206.10p +4.62%Cable & Wireless Communications (CWC) 48.27p +3.81%Xaar (XAR) 853.50p +3.08%Renishaw (RSW) 1,728.00p +2.98%Elementis (ELM) 263.00p +2.77%Bodycote (BOY) 669.50p +2.37%Menzies(John) (MNZS) 826.00p +2.23%FTSE 250 - FallersKazakhmys (KAZ) 255.00p -4.89%Telecity Group (TCY) 672.50p -4.00%Dairy Crest Group (DCG) 519.00p -3.71%Hunting (HTG) 875.00p -3.53%Partnership Assurance Group (PA.) 401.00p -2.67%Inmarsat (ISAT) 695.00p -2.66%Micro Focus International (MCRO) 828.00p -2.42%Moneysupermarket.com Group (MONY) 175.40p -2.39%Balfour Beatty (BBY) 275.30p -2.38%Ashmore Group (ASHM) 385.90p -2.35%BC