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Sea of red on Wall Street bleeds into London markets

The capital’s premier FTSE 100 index jumped 1.57 per cent to above 7,000 points, while the domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, climbed 2.55 per cent to 19,707.38 points

A crash on Wall Street on Wednesday triggered by the chief of the US Federal Reserve signalling stimulus could be pulled earlier than expected bled into London markets yesterday.

The capital’s premier FTSE 100 index closed 0.55 per cent lower at 7,129.21 points, while the mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, dipped nearly one per cent to 22,684.84 points.

Wall Street’s main indexes all closed sharply lower in mid-week after Fed Chair Jerome Powell signalled the central bank could wind down its bond purchases earlier than first planned.

Investors were spooked by ultra accommodative monetary policy being pulled earlier than had been priced in and the first case of the Omicron variant of coronavirus being identified in the US.

Negative sentiment extended across the Atlantic and hit London markets, with financial stocks suffering the heaviest blows.

Alternative asset manager Intermediate Capital Group slid over two per cent, while Pershing Square fell 3.32 per cent.

Investors did not take kindly to an announced tie up yesterday between fund manager Abrdn and online trading platform Interactive Investor. The former finished 3.77 per cent lower.

Meanwhile, on the FTSE 250 AJ Bell, another trading platform, was the worst performers, plummeting over eight per cent despite reporting customer volumes climbed over 87,000 over the last year.

London’s poor performance extended into the continent. The pan-European Stoxx 600 dropped 1.08 per cent.