FTSE ends flat in thin trade with US shut and all eyes on central banks
BRITAIN’S top share index edged down in thin trade yesterday, moving within a tight range as investors awaited central bank meetings today that many expect to result in fresh economic stimulus.
A US holiday contributed to low volumes across the market, at less than half the 90-day daily average, with many investors preferring to wait on the sidelines ahead of the European Central Bank and Bank of England meetings.
“The market is lacking in a direction at the moment and if you see some policy responses the market could possibly continue this upward move but if you don’t, they may struggle to make further progress from here,” said Chris Beauchamp, market analyst at IG Index in London.
London’s blue-chip index ended down 3.26 points, or 0.1 per cent, at 5,684.47 points.
British broker Icap, down 1.1 per cent, was among the most actively traded stocks, as investors sold out fearing it could be dragged into the Libor scandal that has already cost Barclays hundreds of millions of pounds in fines.
ICAP has said that it has never been involved in setting Libor rates, but rather acts as a broker of cash deposits and derivatives based on Libor. The broker also said it is co-operating fully with the investigations.
A fresh batch of weak data gave weight to those calling for fresh stimulus, with the UK service sector expanding in June at the slowest pace since last October, especially as second-quarter earnings hove into view.