UK stocks pared gains by late morning as traders quickly booked profits following a brief early rally, which was driven by optimism ahead of today’s meeting of the Federal Open Market Committee (FOMC) in the US. The announcement on interest rates will be follow by Fed chairman Ben Bernanke’s press conference.
In early afternoon, the FTSE 100 stood at 5,417, down 4 points from Tuesday’s close.
The markets are also looking to this week’s summit of the Group of 20, which will kick off in Cannes on Thursday.
The meeting will focus on the situation in Greece following yesterday’s shock decision by Prime Minister George Papandreou to hold a referendum to approve the latest bailout deal agreed on by the EU, which calls for a new round of austerity measures.
The move raised fears that last week’s anti-crisis plan adopted by the EU will fail and Greece will go into a default, sending shockwaves across the euro zone.
“Overall, bearish sentiment is still rife in the markets; however prices tend to mean revert when they get overstretched – as we have seen to the downside in the last couple of days,” said analyst at forex.com Kathleen Brooks.
So we could be in a range-bound environment for the rest of the week or until the markets digest the Fed, the ECB meeting, payrolls, the G20 and the confidence vote in the Greek government scheduled for Friday.”
Gold producer Randgold Resources (LON:RRS, up 6.5pct at 7,175p) emerged atop the FTSE 100 after releasing a bumper set of third quarter results. Shares in the world’s largest primary silver producer Fresnillo (LON:FRES, up 5.1pct at 1,740p) rose in sympathy.
Other notable risers included clothing retailer Next (LON:NXT, up 5.3pct at 2,692p) and satellite telecommunications firm Inmarsat (LON:ISAT, up 3.8pct at 464p), which both released positive interim management statements today.
Banks were in decline this were with Lloyds (LON:LLOY, down 5.4pct at 28.92p) hitting the bottom of the pile after its chief executive Antonio Horta-Osorio took a temporary leave on health grounds.