THURSDAY MARKET CLOSE: Fed’s mixed messages fuel volatility

Global markets endured another rollercoaster session in a dramatic day that saw the FTSE 100 slump by as much as 2 per cent before recovering.

Banking stocks were shaken by the market uncertainty. Picture: Phil Wilkinson

The highly volatile session saw the Footsie rebound from Wednesday’s sell-off before plunging 200 points as yields on Greek debt spiralled higher and the US federal reserve offered conflicting signals. The index eventually closed just 15.73 points lower at 6,195.91 after European Union officials pledged support for Greece.

Michael Hewson, chief market analyst at CMC Markets, said: “The afternoon session has been an absolute rollercoaster with US data showing an improvement in the US economy while comments from Federal Reserve members sent markets gyrating in all directions with hawkish and dovish statements in equal measure.”

The Dax in Frankfurt was also down by around 2 per cent at one stage before climbing into positive territory. There were heavy losses in Spain and Italy and the Cac40 in Paris was still lower at the time of London’s close.

Financial stocks were among the biggest fallers, with Aviva and RSA both down by more than 2 per cent at 475.1p and 446.1p respectively.

Banking stocks were also shaken by the market uncertainty. Royal Bank of Scotland declined 4.5p to 337.7p, Barclays dropped 4.3p to 207.9p and Lloyds Banking Group fell 1.2p to 72.3p.

Drugs company Shire was again the biggest faller in the top flight after the board of US firm AbbVie confirmed it was no longer interested in a takeover. The stock, which had slumped 22 per cent in the previous session as the deal began to unravel, fell a further 9.5 per cent to 3,629p. Rival AstraZeneca, which has been a target of Viagra maker Pfizer, fell 39.5 to 4,225p.