FTSE LIVE: Stocks fall on Fed tapering fears and weak Chinese manufacturing data

09:30  London's FTSE 100 Index has recovered some ground after drifting lower on its open on disappointing manufacturing figures in China added to more signals that the US will soon begin tapering its massive asset purchase scheme.

The minutes of the Federal Reserve's most recent meeting show that members expect such a move within months, although they may offset some of the impact by cutting the interest rate the Fed pays to banks as part of efforts to encourage extra stimulus into the economy.

The FTSE 100 Index is 9.7 points lower at 6,671 as attention also turned to signs of slowing momentum in the Chinese economy.

Tapering on: The minutes of the latest meeting of the US Federal Reserve showed policy makers believe they can start tapering off the central banks $85billion monthly asset purchases in the next few months

Big fallers include Antofagasta in the mining sector, with a decline of 17p to 790p, while BAE Systems has dropped 5.5p to 428.85p

Speciality chemicals company Johnson Matthey is the biggest riser in the top flight after it posted a 12 per cent rise in half-year profits to £202.1million. It also increased its dividend by 10 per cent to 17p, triggering a share price rise of 3 per cent, or 89p, to 3183p.

Outside the top flight, shares in retailer French Connection are on the front foot after it signalled improved trading fortunes.

It said revenues in its UK and Europe retail business were 2.1 per cent higher on a like-for-like basis, driven by an encouraging response to its autumn range. Shares are 2p higher at 42p.
 
08:00: Shares in London have fallen at the start of the trading day following the release of the latest minutes of the US Federal Reserve's October policy meeting and data showing Chinese factory output grew at a slower pace than expected in November.

The US Fed minutes showed officials felt they could decide to start scaling back the central bank's massive asset-purchase program at one of its next few meetings if economic output in the world’s largest economy continued to grow.

Shares on Wall Street fell following the release of the minutes and Asian stocks also slipped further hindered by weak Chinese data.

Activity in China's vast factory sector grew at a milder pace in November as new export orders shrank, according to the Flash Markit/HSBC Purchasing Managers' Index, bolstering expectations the economy could lose some vigour in the fourth quarter. 

The FTSE 100 Index is currently 0.52 per cent lower at 6,646. Market analysts said preliminary PMI manufacturing and services for France, Germany and the Eurozone were likely to be a focus for investors, with very minor improvements expected and all above 51, bar France which is seen remaining below 50. UK CBI sales trends were seen mixed.

STOCKS TO WATCH:

Sab Miller - The world's second-largest brewer, reported higher profit for the first half of its financial year this morning, helped by sales growth in Africa partially offset by declines in Europe and North America. Adjusted earnings per share rose 3 per cent to $1.204per share.

Johnson Matthey - The world's largest maker of catalysts to control car emissions, posted a 13 per cent rise in first-half profit, helped by increased global production of cars and trucks and demand for its speciality catalysts.

 

National Grid - The UK-based energy distributor said the business was performing in line with expectations under a new price controls regime in the UK, after reporting a 7 per cent drop in its half-year pre-tax profit.

BHP - The miner says it has reduced planned capital expenditure by 25 per cent to $16billion for the 2014 financial year and expects demand for potash to grow by about two to three per cent per annum to 2030.

Vodafone - Vodafone said it is open to keeping network spending above its traditional levels once its two-year booster programme has ended if it needs to respond to customer demand and competitor moves.

Reed Elsevier - The business information group said it could return more cash to shareholders after investing in new products to grow revenues and making bolt-on acquisitions.

BT - Fresh from stunning its rivals in the battle to show European Champions League soccer, BT will be in a strong financial position to bid for the next round of English Premier League rights, its chief executive said on yesterday..

Bumi -The coal miner will postpone an investor vote on a planned split with Indonesia's Bakrie family that co-founded it, after the buyer of its stake failed to provide details of his financing arrangements by an agreed deadline.