Market overview: Citi pushes BoE rate forecast out to Q4 2016

1630:Close A motley group of precious metals mining and large pharmaceutical stocks led to the upside on Friday, as the rest of the market got walloped, with oil stocks figuring prominently at the bottom of the pile. On Thursday, the Fed’s Janet Yellen bravely aired her concerns regarding growth prospects in emerging markets. Such a high-level endorsement of those concerns, in itself somewhat of an about face, sparked concern among traders, more so given that she also held out the possibility of an October rate rise. That is all very logical unless you are a trader holding a large position.

Yellen’s stance was echoed by the ECB’s Coeure, who said the recovery in the Eurozone has to be protected from external shocks. For their part, analysts at Citi pushed back their forecast for the first increase in Bank Rate. FTSE 100 down 82.88 points to 6,104.11.

1441: The UK economy will grow more slowly in 2015 and 2016 than previously expected by analysts at Citi, which means the Monetary Policy Committee is likely to tighten interest rates by less. For that reason, he know expects only one hike in Bank Rate next year, in the fourth quarter, versus two – split between each half of the year, Michael Saunders said. “We regard this as a mid-cycle slowdown rather than a crash.”

1305: Losses on the top-flight index are being ascribed by some media outfits to a 'fat finger' or an error in an automated trading system. Shares in BHP Billiton, BP, BT Group, Diageo and HSBC are among the affected stocks. FTSE 100 down 121.49 points or 1.96% to 6,065,64.

1139: “So if the Fed has decided not to move just when they’re at the beginning of a tightening cycle, what does that mean for the ECB, who are still in the midst of easing?” posited Laurence Mutkin, global head of G-10 rates strategy at BNP, on Bloomberg TV. Simply put, there is some market talk that the ECB may now be forced to up its own game and increase QE. The yield on 10-year Gilts dropped ten basis points to 1.85% and that on Italian and Spanish benchmark bonds by a similar amount, sending yields to 1.81% and 1.99%, respectively.

1124: Shares in Ferrexpo are crumbling after the iron-ore miner and pellet producer announced it has $174m - the better part of its $280m in cash - tied up in an insolvent Ukrainian bank under the control of its largest shareholder, founder Kostyantyin Zhevago. The lender, Bank Finance&Credit JSC, was declared insolvent overnight by the National Bank of Ukraine.

0847: Worldpay which is owned by Bain Capital and Advent International has decided to go ahead with a flotation, despite an offer from Ingenico. What do they see? The company said it intends to raise around £890m and its publicly traded shares are expected to be at least 25% of outstanding stock.

0838: Stocks have started lower led by large-cap banks and oil as investors digest moves in government debt and oil markets after Thursday's Fed decision. The likes of Aviva, Barclays and BP are now at the bottom of the pile. Precious metals miners Randgold Resources and Fresnillo on the other hand are basking in the glow of the US dollar index's demise overnight. And on the other side of the ledger, defensive issues naturally. That includes the usual list of suspects: AstraZeneca, National Grid, United Utilities etc,.. Front month Brent crude futures are down by 0.5% to hit $48.82 per barrel out on the ICE, while the yield on the benchmark 10-year Gilt is off by no less than 12 basis points to 1.83%. As one might expect, cable is barely changed, dipping just 0.03% to 1.5585 as Carney and the MPC are likely to move in lockstep - as far as traders are concerned - with the FOMC. FTSE 100 down 46.15 points to 6,140.03.