Investors were in no mood to part with their money on Thursday after Japan unexpectedly kept the lid on its economic stimulus punchbowl.
The FTSE 100 recovered slightly from the morning’s 95-point intraday loss but was still 70.7 points adrift by lunchtime.
The BoJ elected not to introduce more pump-priming measures, catching investors on the hop and opening a trap door beneath Japanese equities.
The Nikkei 225 plunged 3.6%, and the effects were felt in other markets including China’s Shanghai Composite, which dropped about 0.3%.
Little support was expected from Thursday's session on Wall Street, where economists predicted downbeat first quarter GDP data.
In the UK, house prices suffered their joint slowest rise in April since June last year, matching a similar gain in November, according to building society Nationwide.
That didn’t stop Taylor Wimpey PLC (LON:TW.) putting out a positive trading update, however. The housebuilder reported a 14% rise in customer demand for its homes against last year. Its shares climbed 0.6p to 187.7p.
Japanese economic concerns were of supreme indifference to backers of London's growth shares, and the two main Aim indices were little changed.
The FTSE Aim 100 eased a couple of points to 3,403 while the broader-based FTSE Aim All-Share was slightly off at about 729.
Andalas Energy & Power (LON:ADL) was the biggest loser with a 73.3% fall to 0.31p as the Indonesia-focused oil and gas explorer unveiled a reverse takeover, AIM readmission and placing.
Resource stocks were also setting the pace, with Goldstone Resources PLC (LON:GRL) and Prospex Oil and Gas PLC (LON:PXOG) the top two performers.
Goldstone surged 68.2% to 2.78p as fast-growing resource investor Metal Tiger (LON:MTR) increased its stake in the junior gold explorer.
Prospex added more than a third to its market capital as it announced that Hutton Poland, in which it has a 49% stake, has been formally awarded the Kolo licence in Poland.
The Boleshaw prospect on the Kolo licence is ready for drilling, with a drill location determined. Shares rose 38% to 2p.
Elsewhere, a first-quarter production update from Avocet Mining PLC (LON:AVM) sent shares in the gold miner 26% higher to 5.05p.
Meanwhile, the inexorable rise of Strategic Minerals PLC (LON:SML) continued after it said on April 21 it was readying for drilling at the Hanns Camp nickel/copper prospect.
The shares were up 27.7% to 0.42p today, having risen 185% in the last week.
Outside resources, Big Data software specialist WANdisco PLC (LON:WAND) regained some of its glamour stock status, rising 15.3% to 207.5p on the back of an original equipment manufacturer sales partnership with Big Blue, otherwise known as IBM.
Sector peer Outsourcery (LON:OUT) lost early gains to stand 8.1% off at 4.25p after it cleared the way yesterday through a funding agreement with its major lender Vodafone to sell its main assets.
The bears were not monkeying around with Zoo Digital Group (LON:ZOO), however, after the provider of subtitling and digital distribution services for the global entertainment industry's issued a trading update.
The company expects to report an underlying loss (LBITDA) of US$200,000 for the year to the end of March, versus LBITDA of US$700,000 the year before. Shares fell 13.5% to 10.38p.
LONDON OPEN
While investors were still reading the runes of the US central bank's policy makers' statement yesterday, the Bank of Japan (BoJ) bowled markets a googly.
The BoJ elected not to introduce further stimulus measures, catching investors on the hop and opening a trap door beneath Japanese equities.
The Nikkei 225 plunged 3.6%, and the effects were felt in other markets, including the UK, where the FTSE 100 was 81 points (1.3%) lower at 6,239 after 90 minutes of trading.
“The BoJ's overnight decision undid a positive response to the US Fed’s doveish update yesterday evening, with the US central bank's tempering of concerns regarding external risks being offset by mixed US data to keep us guessing about the timing of the next US rate hike,” noted Michael van Dulken at Accendo Markets.
The Footsie's performance was not helped by a negative reaction to results from Lloyds Banking Group PLC (LON:LLOY).
The bank's shares were down 4.2% at 66.34p, as underlying pre-tax profits fell 6% to £2.1bn.
Concerns over Japanese economic policy were of supreme indifference to backers of London's growth shares, and the two main Aim indices were little changed.
The FTSE Aim 100 eased a point or so to 3,405 while the broader-based FTSE Aim All-Share was a smidgen firmer at 729.
Resource stocks were setting the pace, with Prospex Oil and Gas PLC (LON:PXOG) and Avocet Mining PLC (LON:AVM) the top two performers.
Prospex added more than a third to its market capital as it announced that Hutton Poland, in which it has a 49% stake, has been formally awarded the Kolo licence in Poland.
The Boleshaw prospect on the Kolo licence is ready for drilling, with a drill location determined.
The first quarter production update from Avocet sent shares in the gold miner 34% higher.
Meanwhile, the inexorable rise of Strategic Minerals PLC (LON:SML) continues since its announcement on 21 April about readying for drilling at the Hanns Camp nickel/copper prospect.
The shares were up 23% today and were up 185% over the last week.
Outside of the resource sector, Big Data software specialist WANdisco PLC (LON:WAND) regained some of its glamour stock status, rising 17% to 210p on the back of an original equipment manufacturer sales partnership with Big Blue, otherwise known as IBM.
Sector peer Outsourcery (LON:OUT) continued its share price renaissance, rising 11% after it cleared the way yesterday through a funding agreement with its major lender Vodafone to sell of its main assets.
The bears were not monkeying around with Zoo Digital Group (LON:ZOO), however, after the provider of subtitling and digital distribution services for the global entertainment industry's trading update.
The company expects to report an underlying loss (LBITDA) of US$0.2mln for the year to the end of March, versus LBITDA of US$0.7mln the year before.
Shares slumped 19% to 9.74p.
EARLY SNAPSHOT
The FTSE 100 dropped 0.8% as expected this morning, 20 points lower than Wednesday's close.
Lloyds Banking Group was the biggest loser this morning, down 2.3% to 67.65p.
The bank's first quarter underlying profits fell 6% to £2.05bn, but it could have been worse as a reduction in imparment charges offset a small decline in income.
A 3% increase in net interest income was marred by a 7% drop in other income, as well as continued pressure on fees and commissions.
Taylor Wimpey however was bucking the general downward trend, up 0.86% to 188.7p. Unfazed by the prospect of a Brexit, trading at the house builder was largely unaffected by the impending referendum.
Underlying demand was "solid" across all countries in which it traded, it said.
The Bank of Japan maintained its policy rate, but did not implement the negative rate bank loans or vote to bolster the country's stagnating economy, much to the surprise of investors.