FTSE stands 36 points lower

Nervy traders took money off the table today as the City of London positioned itself ahead of the US Federal Reserve’s decision on interest rates.

The FTSE 100 Index stood 34.6 points lower at 6530.8 at mid-morning, with banking stocks among those lower after a solid session yesterday.

Traders said attention was focused on the United States ahead of the anticipated cut in interest rates, from 4.5% to 4.25%.

Matt Buckland, of CMC Markets, said: “A quarter point is now largely priced in, but there is always the scope for some element of surprise.”

The biggest falls of the session came in the property sector after analysts noted comments from New Star Asset Management that the value of its property portfolio had fallen by 8%.

Hammerson led the fallers board with a drop of 37p to 1059p, while British Land eased 26p to 947p and Liberty International dipped 17p to 1026p.

Among banking shares on the back foot, Royal Bank of Scotland slipped 5.5p to 484.5p and Lloyds TSB eased 7.25p to 497.25p – reversing some of the 3% gain achieved yesterday after a reassuring update on recent trading.

Leisure group Whitbread was also 1% lower, as it surrendered gains seen after it posted sales figures at the top end of expectations. Strong trading at its Premier Inn hotels led the rally, but shares later dipped 22p to 1403p amid concerns about weaker trading at its Beefeater restaurant estate.

Outside the top flight, Carpetright shares jumped 6%, or 61p to 1076p, after chairman Lord Harris said talks over a buy-out were at an advanced stage and at the same price proposed in October.

And Thomas Cook shares rallied 16p to 274.5p after it issued an upbeat trading update, causing shares in Thomson owner TUI Travel to gain 14.5p to 282p.