FTSE in negative territory

World markets struggled for direction today, despite an apparent boost from the US Federal Reserve last night.

The central bank said the world’s largest economy was shrinking at a slower pace, while also signalling it was in no hurry to hike interest rates.

This failed to inspire Wall Street, which closed in negative territory, and was met with a similar response in London after the FTSE 100 Index dropped 31.5 points to 4248.4 by mid-morning.

Commodity stocks caused the biggest downward pressure, with Lonmin down 31p at 1183p and BHP Billiton off 29.5p to 1365.5p.

Insurers were also heading south after Prudential fell 15.25p to 401.5p, Aviva dropped 7.5p to 326.5p and Friends Provident declined 1.8p to 65.1p.

The biggest gain of the session came from Royal Bank of Scotland, up 1.21p to 36.8p, after Cazenove upgraded the stock and said the company’s new management team was on the right path. The rest of the sector struggled for direction with Barclays down 1.25p to 269.6p and Lloyds Banking Group off 1.3p at 66.3p.

Elsewhere in the top flight, British Airways shares were on the recovery path amid speculation the airline could turn to shareholders for cash. Shares were 1.4p higher at 126.7p.

Directories firm Yell was among the pacesetters in the FTSE 250 Index as shares in the debt-laden group continued to recover after their battering earlier in the week. The stock was 0.75p higher at 28.25p, a gain of 3%.

The biggest corporate news of the session came from DSG International after the PC World owner reported losses of £140m (€163m). However, investors were encouraged by recent signs of trading stability, leaving shares 0.75p higher at 24.5p.

Comet owner Kesa Electricals, which posted losses yesterday, was down 1.5p at 108p.