London close: FTSE ends lower after FOMC interest rates, 'fat finger' error

LONDON (ShareCast) - (ShareCast News) - The FTSE ended Friday lower as the market continued to digest the Federal Reserve's decision to keep interest rates unchanged and as the London Stock Exchange (Other OTC: LDNXF - news) investigated a "fat finger" trade. The Federal Open Market Committee announced it would keep rates at 0.25% overnight amid concerns over the impact of China's economic slowdown on the global market.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in a statement.

Fed Chair Janet Yellen said in light of heightened uncertainty abroad the Fed decided to wait for a rate hike. An interest rate hike in future will depend on a wide range of economic and financial indicators, she added.

However, Richmond Fed president Jeffrey Lacker voted in favour of raising the key rate by 0.25 percentage point.

"In reality the decision to hold rates shouldn't really have been in doubt given the tepid wage growth and declining inflation, yet the fact that we only got one dissenter in the form of Jeffrey Lacker, President of the Richmond Fed suggests that there was probably a certain degree of unanimity," said Michael Hewson, chief market analyst at CMC Markets.

Chris Williamson, chief economist at Markit (NasdaqGS: MRKT - news) , said the Fed's decision may be seen by many as appropriate in the wake of slowing growth in China but "this is likely to be merely a temporary forestalling of the inevitable".

The expectation is now that the Fed will hold off until 2016, with traders putting a 52% chance of a rate hike in January, according to CME FedWatch. The FOMC is scheduled to meet 26-27 January.

Japan's finance minister Taro Aso said the Fed's decision reflected lobbying by emerging economies. Aso said the US central bank should raise interest rates slowly in the future to avoid the risk of sparking capital flight.

"A lot of countries would face depreciation of their own currencies if the U.S (Other OTC: UBGXF - news) . raises rates rapidly just because of improvements in its own economy, which would cause a reversal of capital back to the US," he said.

In other US news, the Conference Board's leading economic indicators edged slightly higher in August to 0.1% from a -0.2% reading in the previous month, but short of forecast calling for a 0.2% increase.

"The US LEI suggests economic growth will remain moderate into the New Year, with little reason to expect growth to pick up substantially," said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board.

Closer to home, losses on London's top-flight index in afternoon trade were being described by some media outfits to a 'fat finger' error or an issue in an automated trading system. The London Stock Exchange said it was investigating the error but that no trades had been cancelled.

The Wall Street Journal reported that one senior London-based trader said the move could be related to the expiry of a large number of stock futures and options on Friday.

Shares (Berlin: DI6.BE - news) in nine of the biggest companies including BP , Vodafone Group (NasdaqGS: VOD - news) , HSBC Bank , Rio Tinto Group , B T Group, BHP Billiton (NYSE: BBL - news) , National Grid (LSE: NG.L - news) , Diageo (LSE: DGE.L - news) and British American Tobacco were suspended, a LSE spokeswoman said. The companies have all since resumed trading.

Meanwhile, Citi said the UK economy will grow more slowly in 2015 and 2016 than previously expected, which means the Monetary Policy Committee is likely to tighten interest rates by less. On the back of "softer data and surveys in the third quarter", together with worries over growth in emerging markets, the broker's Michael Saunders lowered his forecast for the rate of growth in gross domestic product next year and the following to 2.6% and 2.5%, from 2.8% and 3% previously.

Looking ahead, all eyes now turn to Sunday's Greek elections, with polls showing the two main parties are neck and neck. The Syriza and New Democracy party are both expected to be unlikely to secure the 38% vote share needed for a majority, meaning a coalition is likely.

In corporate news, Glencore (Xetra: A1JAGV - news) slumped after the Investment Association and the National Association of Pension Funds criticised the commodities group for not considering all the company's shareholders equally when it issued $2.5bn worth of new shares to cut net debt.

Oil service provider Weir Group slid as oil prices declined.

Miners Randgold Resource and Fresnillo (Other OTC: FNLPF - news) were top risers as the price of gold and silver rose.

Petra Diamonds (LSE: PDL.L - news) declined after saying full-year revenues dropped 10% to $425m on the back of lower diamond prices, as expected.

Market Movers techMARK 3,059.84 -0.01% FTSE 100 6,104.11 -1.34% FTSE 250 16,950.73 -0.54% FTSE 100 - Risers Randgold Resources Ltd. (RRS) 3,863.00p +3.59% Fresnillo (Amsterdam: FN6.AS - news) (FRES) 610.00p +3.39% AstraZeneca (Swiss: AZN.SW - news) (AZN) 4,370.00p +2.33% Sainsbury (Amsterdam: SJ6.AS - news) (J) (SBRY) 228.30p +1.47% Sky (Amsterdam: BK8.AS - news) (SKY (LSE: BSY.L - news) ) 1,023.00p +0.89% British Land Company (BLND) 812.50p +0.87% Land Securities Group (LAND) 1,237.00p +0.73% United Utilities Group (UU.) 883.00p +0.40% Vodafone Group (VOD) 216.75p +0.25% National Grid (NG.) 851.20p +0.07% FTSE 100 - Fallers Glencore (Amsterdam: GX8.AS - news) (GLEN) 126.00p -4.65% GKN (GKN (LSE: GKN.L - news) ) 273.80p -3.93% Royal Dutch Shell (Xetra: R6C1.DE - news) 'A' (RDSA) 1,582.00p -3.80% BP (BP.) 333.45p -3.54% Royal Dutch Shell 'B' (RDSB) 1,599.00p -3.41% Weir Group (WEIR) 1,245.00p -3.04% BG Group (LSE: BG.L - news) (BG.) 985.40p -2.92% Prudential (Amsterdam: PD8.AS - news) (PRU (HKSE: 2378-OL.HK - news) ) 1,369.00p -2.80% Barclays (Swiss: BARC.SW - news) (BARC) 253.25p -2.76% Standard Life (LSE: SL.L - news) (SL.) 399.90p -2.65% FTSE 250 - Risers UDG Healthcare Public Limited Company (UDG) 540.50p +9.63% AO World (Other OTC: AOWDF - news) (AO.) 169.90p +9.47% Allied Minds (Other OTC: ALLWF - news) (ALM) 535.00p +7.24% PayPoint (PAY) 1,091.00p +6.34% Centamin (DI (KSE: 003160.KS - news) ) (CEY) 66.00p +5.68% OneSavings Bank (Stuttgart: 2OS.SG - news) (OSB) 393.00p +5.08% Riverstone Energy Limited (RSE) 977.00p +5.05% IP Group (LSE: IPO.L - news) (IPO) 259.10p +3.31% Acacia Mining (LSE: ABG.L - news) (ACA) 250.00p +2.71% Petra Diamonds Ltd.(DI) (PDL) 111.00p +2.68% FTSE 250 - Fallers Premier Oil (LSE: PMO.L - news) (PMO) 78.10p -6.97% Premier Farnell (LSE: PFL.L - news) (PFL) 105.80p -5.54% Kaz Minerals (LSE: KAZ.L - news) (KAZ) 150.70p -5.34% Tullow Oil (LSE: TLW.L - news) (TLW) 199.80p -5.31% Enterprise Inns (LSE: ETI.L - news) (ETI) 109.50p -4.20% Lonmin (LMI) 21.12p -4.13% Northgate (NTG) 479.70p -4.06% Evraz (EVR) 68.75p -4.05% Elementis (ELM) 218.20p -3.58% Man Group (LSE: EMG.L - news) (EMG) 159.00p -3.58% FTSE TechMARK - Risers Oxford Instruments (Other OTC: OXGGY - news) (OXIG) 641.50p +8.36% Oxford Biomedica (LSE: OXB.L - news) (OXB) 9.25p +6.81% Ricardo (RCDO) 900.00p +1.35% E2V Technologies (LSE: E2V.L - news) (E2V) 237.25p +1.28% IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 201.76 +0.94% Consort Medical (Other OTC: CSRMF - news) (CSRT) 931.00p +0.76% Spirent Communications (Other OTC: SPMYY - news) (SPT (Taiwan OTC: 8431.TWO - news) ) 75.75p +0.33% Promethean World (Other OTC: PMTWF - news) (PRW) 39.62p +0.32% Skyepharma (SKP) 347.00p +0.22% Torotrak (TRK) 6.25p +0.08% FTSE TechMARK - Fallers SDL (SDL (LSE: SDL.L - news) ) 354.75p -3.60% BATM Advanced Communications Ltd (Other OTC: BTAVF - news) . (BVC) 18.50p -1.99% Dialight (DIA (Amsterdam: DI6.AS - news) ) 640.00p -1.69% KCOM Group (LSE: KCOM.L - news) (KCOM) 89.75p -1.10% Gresham Computing (LSE: GHT.L - news) (GHT) 114.00p -0.87% NCC Group (LSE: NCC.L - news) (NCC (BSE: NCC6.BO - news) ) 256.50p -0.77% Innovation Group (Other OTC: INVGF - news) (TIG) 39.75p -0.62% RM (RM (LSE: RM.L - news) .) 170.00p -0.44%