London shares opened lower as investors mulled what to make of the US Federal Reserve’s apparent curve ball on a rate rise this year.
FTSE 100 was 71 points lower at 6,366 with a mixed bag of news from some of FTSE;s largest companies adding to the uncertainty.
Having all but dismissed the chance of a US interest rate rise this year, markets were caught out as the Fed indicated a December rate rise was a possibility.
“The statement was undoubtedly more hawkish than before and put December well and truly back on the table and investors didn’t really know how to take this,” said Craig Erlam, market analyst at OANDA. The Dow Jones fell almost 200 points, though Asian markets were more mixed.
Barclays (LON;BARC) was the worst performer along with Smith & Nephew as trading updates from both left investors underwhelmed.
Barclays quarterly results undershot analysts expectations with profits down to £861mln from £1.22bn a year ago.
The bank appointed American Jes Staley as its new chief executive yesterday and a provision of £290mln for forex overcharging suggests he has plenty of work to do.
Shares fell 5% to 241p.
Currency headwinds did for orthopaedic equipment giant S&N (LON:SN), which also saw a sharp drop in him implant revenues. Shares tumbled 4.6% to 1,097p.
Among the smaller companies, Falkland Oil (LON:FOGL) took a predictably heavy hit after its latest well off the Falkland Islands came up as non-commercial. Shares crashed 33% to 13.6p, with fellow Falkland explorers Rockhopper (LON:RKH) and Premier Oil (LON:PMO) off around 5%.
Optimal Payments (LON:OPAY), meanwhile, fell on reports it had suffered a cyber breach in 2011. The company said the first it knew about it were recent media enquiries, a revelation that sent the shares down 17% to 290p.
Better news on the digital payments front came from Bango, which saw its shares rocket 14% to 115p as its Direct Carrier Billing service, for making app payments, is now available to some iTunes customers in Germany.