The FTSE 100 has joined markets across Europe and Asia by dropping after opening as investors remain nervous about the prospect of the US scaling back quantitative easing.
At 1040 BST, the blue-chip index was down 0.69 per cent to 6,420.96 while the Euro Stoxx 50 shed 1.39 per cent after opening to sit at 2,784.23. These losses followed falls overnight in Asia, with the Nikkei 225 dropping 2.63 per cent to 13,396.38.
Both regions mirror the slide seen in the US yesterday, where stockmarket racked up their first four day losing streak this year. Investor sentiment has been hit by the view that the Federal Reserve is likely to start easing the pace of its $85nm-a-month bond-buying programme as soon as next month.
The markets are now awaiting the publication of the minutes for the Fed’s monetary policy meeting in July to determine the direction of the central bank’s future actions.
Charles Stanley Direct head of investment research Ben Yearsley says: “Global market sentiment seems to back where it was following the meeting of the US Federal Reserve in June.
“Yet without any soothing words from chairman Ben Bernanke on interest rates and quantitative easing tapering expectations, government bond yields have continued to spike higher and equities are now falling.”