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FTSE 100 picks up the pieces after whirlwind sell-off

There was a rush to defensive shares on the UK’s blue chip index as it failed to bounce back from yesterday’s mammoth global sell-off.

The Footsie picked up this morning but began to drift lower after lunch to 6,178.

Remarks from Fed chairman Ben Bernanke about a possible tapering of the US bond buying programme that saw the £48bn wiped off the Footsie.

Bernanke said the Fed would begin to take its foot of the asset purchase pedal by the end of this year.

Ashraf Laidi, chief global strategist at City Index, said: “We did not expect Bernanke to introduce a time reference to a possible slowdown in purchases, which made the notion of tapering a question of “when” and not “if”.

“We are not yet certain that the Fed will eventually taper this year, but as we stressed throughout this year, USD strength shall remain our principal theme going forward as it had prevailed over the past 5-6 weeks (interrupted by short-lived corrections).”

Today, traders found solace in defensive shares, such as travel and leisure shares, as well as food and drink stocks.

As a result, TUI travel (LON:TT.), the owner of First Choice and Thomson, fared well, up 2.8%, while investors topped up their Diageo (LON:DGE) shareholdings as the company behind Johnnie Walker whisky and Smirnoff vodka climbed 2.1%.

Sugar and starches maker Tate & Lyle’s (LON:TATE) shares sweetened thanks to the trend, along with SABMiller, the brewer of Peroni lager, while free-to-air broadcaster ITV (LON:ITV) added 2.6% after a bullish note from Citigroup.

Silver miner Fresnillo (LON:FRES) lost another 4.6% of its shine at the bottom of the table, with RBS (LON:RBS) not far behind, down 4.2%.

On the mid cap index, the smallest of Britain’s ‘big four’ telecoms TalkTalk (LON:TALK) dialled 7% lower as Citi suggested BT’s (LON:BT.A) new free Premier League offering could tempt its broadband customers away.

Citi believes selling TalkTalk shares and buying BT is the way forward for investors. BT shares dialled up 2.2% on the write-up.

Afren (LON:AFR) lost 2% as it downgraded in Jefferies’ comprehensive round-up of oil E&P investment opportunities.

Ascent Resources (LON:AST) climbed to the summit of AIM, up 28%, with strong volumes of the stock being traded.

Amur Minerals (LON:AMC) shares rose on Friday as its Kun Manie nickel deposit in Russia grabbed the attention of the investor world.

SP Angel’s John Meyer picked up on the 4% share price rise and put it down to “new trade and expectations for a positive field season”.

The gold price regained a few cents of yesterday’s losses, meaning some respite for Goldstone Resources (LON:GRL), up 5.6%, Vatukoula Gold Mines (LON:VGM), up 5% as it completed a £4.5mln share subscription, and Orogen Gold (LON:ORE), which lifted 5.5%.

Medusa Mining (LON:MML, ASX:MML) lost 2.5% as some light was shed on its recent share price fall.

The company revealed that the company in charge of upgrading the mill at its Co-O gold mine in the Philippines has gone into administration.


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