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FTSE 100 dips as all eyes are on the Fed

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UK investors were sitting on their hands, waiting for this evening’s announcement from the US Federal Reserve, which is expected to shed some light on how soon the Fed plans to taper off its bond buying programme.

Meanwhile, no one was really surprised by today’s announcement from the UK’s central bank, when it was revealed this morning that the Bank of England’s policy committee voted 6 to 3 in favour of keeping its bond buying pot at £375bn.

Governor Sir Mervyn King was again outnumbered in his fifth and final attempt to boost the programme to £400bn in his last meeting before handing over the reins to Canadian Mark Carney. The bank voted unanimously to keep interest rates at a record low 0.5%, which came as even less of a surprise than the quantitative easing vote.

More than two-thirds of the blue-chip index’s constituents were in the red, pushing the FTSE 100 25 points lower to 6,348.

Leading the decline was power management firm Aggreko (LON:AGK) after UBS downgraded the stock to ‘neutral’ from ‘buy’, while Cazenove trimmed Aggreko’s price target to £18 from £18.70.

Water companies United Utilities (LON:UU.) and Severn Trent (LON:SVT) saw their share prices diluted as they traded in ex-dividend form, while gold producer Polymetal (LON:POLY), which will shortly depart the FTSE 100, also traded sharply lower.

BT (LON:BT.A) stumbled after it was announced chief executive Ian Livingston is swapping the telecoms giant for a job with the government in September.

He will become Minister of State for Trade and Investment after five years at the helm at BT. He will join the House of Lords before taking up his front-bench post in December.

“Ian has done a tremendous job in transforming BT,” said BT’s chairman, Sir Michael Rake.

“His decision to accept a government post demonstrates the sense of public service which many of us know to be characteristic. He leaves behind him a very capable team, one which will take forward the strategy that has served BT well and which lays out the path to further success.”

Replacing Livingston is current chief executive of BT Retail, Gavin Patterson, who has been a board member since 2008. Shares dived 1.74%.

In contrast to the blue-chip index, the FTSE 250 closed up 16 at 14,010, with Micro Focus (LON:MCRO) the star performer after well-received results. Panmure Gordon, a long-time fan of the stock, upped its price target to 820p from 800p.

Imagination Technologies (LON:IMG) rose 6.2% as investors expressed relief that the business appears to be stabilising after the profits warning in May.

Over on AIM, digital advertising specialist MediaZest (LON:MDZ) drummed up more excitement on Wednesday about its big contract win announced back in April, sending the shares up 16%.

It still cannot name the company the £1mln plus contract is with, but it says it is a “constituent of the consumer staple sector of the S&P 500 index".

Companies fitting that description include Procter & Gamble, which owns washing powder Ariel and shaving equipment brand Gillette, and Kimberly-Clark, the company behind Kleenex tissues.

The news was announced alongside a placing to raise up to £358,000, most of which will be used to pay down existing debt. The placing at 0.25p represents a big premium to yesterday’s closing market price of 0.185p.

Philippines-focused Medusa Mining (LON:MML) hardened 12% a day after SP Angel questioned the extent of the recent share price fall. The gold price may have lost plenty of its shine of late, but analyst John Meyer sees no reason for Medusa’s slump.

Jubilee Platinum (LON:JLP) said a liquidation application against a Platinum Australia (PLA) subsidiary has been set aside - paving the way for the completion of its merger with PLA.

Westdawn Investments (trading as JIC Mining Services) applied for the winding up of PhokaThaba Platinum, which owns 65.75% of PLA’s Smokey Hills mine in South Africa but the parties agreed on June 18 to a settlement of £224,500 to be paid to JIC within 14 days.

That news sent Jubilee’s share price soaring 17%.

Gulf Keystone (LON:GKP) was a little off the pace, after it said it has started drilling its first deep well on the Shaikan Field in Kurdistan, a process that will take nine months.

Shaikan-7 is expected to reach a vertical depth of 4,500 metres, targeting the Triassic formation for light oil.

Elsewhere, the stock market value of Deltex Medical (LON:DEMG) increased by 1.4% after the result of a pilot of its ODM blood flow monitor in North Carolina showed substantial benefits.

Fast-growing mobile marketing firm InternetQ (LON:INTQ) jumped after signing a key strategic partner agreement in South East Asia. The deal is with GMobi (General Mobile Technology), a leading mobile platform operator and provider of mobile Internet services across key emerging markets.

InternetQ will work with GMobi, providing a range of tailor-made content mobile related services to more than thirty of GMobi's original equipment manufacturer (OEM) and original design manufacturer (ODM) partners across multiple territories.

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