FTSE 100 in rollercoaster session after lack of Japan stimulus

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A reluctance by Japanese policymakers to up their stimulus measures sent markets into turmoil today, with the FTSE 100 falling below the 6,300 level for the first time in almost two months.

The UK benchmark was more than 100 points lower by lunchtime with trading following the overnight 1.45 per cent drop in Japan’s Nikkei 225.

The UK’s topflight index managed to recover only some of its losses and finished the day off by 60.37 points at 6,340.08.

Ahead of the Bank of Japan’s meeting last night there was plenty of speculation that it would tweak its money market operations and asset purchases. Instead the Bank’s policy board opted to upgrade its economic assessment.

Capital Economics chief global economist Julian Jessop says: “This disappointed those hoping for further monetary easing in response to the recent volatility in financial markets. However, the board is surely right to take the long view.

“Meanwhile, the government’s Business Outlook Survey showed that the corporate sector continues to grow in confidence.”

Only 10 of the FTSE’s 100 constituents managed to enjoy a rise on the day, albeit that they all rose modestly. Royal Dutch Shell ‘A’ and ‘B’ Shares following a share buyback programme put on almost 1 per cent each to 2,127.5p and 2,210p respectively.

Mining stocks and financials dragged the UK’s bluechip index down with Evraz being the steepest faller at 6 per cent off at 117.3p while Polymetal International and Fresnillo lost 4 per cent a piece to 617p and 1,076p respectively.

Fund managers Aberdeen Asset Management, last week downgraded by Bank of America Merrill Lynch, fell 4 per cent to 395.8p, while Schroders also shed 4 per cent to 2,159p.