Britain’s blue chip stocks ended the day significantly lower having pared losses earlier in the afternoon, despite gains in the US.
The FTSE 100 ended the day 102 points lower, 1.68% to 5,979 after a late sell-off as analysts worried the positive US open would run out of steam by the end of the session.
Connor Campbell at Spreadex said: “The Dow Jones initially jumped over 400 points as trading got underway, with the added bonus of better than expected durable goods orders adding to the positive atmosphere.
Those kinds of gains were a bit too enthusiastic for investors, with the index dropping back to a more reasonable 200 point increase as the session continued.
“Yesterday saw similar scenes at the open only for the US markets to fall at the final hurdle, leading to the muted trading that has defined this Wednesday,” Campbell added.
Chris Beauchamp at IG said: “Having seen US markets embark on a rollercoaster ride yesterday, the omens did not look good for European markets today.”
China’s injection of fresh liquidity has been seen as a positive move, as the PBoC looks to build on yesterday’s rate cut, but the picture still remains finely balanced he warned.
In Europe, the French Cac40 was 1% lower to 4,516 while the German Dax lost almost 1% to 10,030.
Back on the FTSE 100, miners weighed heavily on the index as the central bank actions caused further falls in commodity prices
Silver miner Fresnillo (LON:FRES) softened 45p to 594p while gold miner Randgold Resources (LON:RRS) dropped 184p to 3,817.
Meanwhile, Advertising and marketing group WPP (LON:WPP) backtracked 34p to 1,327p as it forecast a better third quarter but voiced caution about the global economy.
At the other end of the index, Weir Group (LON:WEIR) was boosted by M&A news within the sector.
Oil service company Schlumberger is to merge with Cameron in a combined stock and shares deal worth US$14.8bn. Weir’s shares gained 2.1% to 1,360p.
Away from the index, gambling stole the headlines with the news that Paddy Power (LON:PAP) has made plans to merge with rival Betfair (LON:BET) in a deal to create a gaming giant.
Paddy said its shareholders would own 52% of the group while Betfair investors would have a 48% stake. Shares in Betfair rose 21.2% to 3,154p while Paddy Power jumped 18.5% higher at 93p.
In the small cap space, Solo Oil (LON:SOLO) surged as oil services giant Schlumberger suggest there are 10.99bn barrels of crude across the 55 square miles near Gatwick Airport owned by the explorers.
Meanwhile, Solo and Aminex are now ‘ready’ to start producing gas from the Kiliwani North field onshore Tanzania. Solo’s shares jumped 15% to 0.45p.
Elsewhere, Asiamet Resources (LON:ARS) gained 17.3% to 1.35p as it uncovered a high-grade copper zone at Beruang Kanan (BK), in Kalimantan, Indonesia, that has the potential to transform the economics of the project.