London Market Report
- 3 June 2014
- From the section Business
(Close): Shares in London ended a touch lower in thin trading volumes, as dealers fixed their attention on Thursday's decision by European Central Bank (ECB) on interest rates.
Earlier, weak eurozone inflation figures added to the expectation that the ECB will cut interest rates and announce further stimulus measures. Inflation in the eurozone fell to 0.5% in May.
The FTSE 100 index closed 27.80 points, or 0.4%, lower at 6,836.30.
Traders were reluctant to take out large positions ahead of the ECB meeting. If the ECB's head, Mario Draghi, doesn't announce cuts and stimulus measures, share prices could fall significantly.
"He's almost promised too much, so he'll have to deliver something. If he doesn't, the market will tank, and if it does, it's probably priced in," said Joe Rundle, head of trading at ETX Capital.
Solid third quarter results at Wolseley took the plumbing supplies company's shares 1.6% higher. Much of the firm's business is done in the United States, where it's seen as benefitting from a pick-up in house construction in the coming months.
Among the fallers, the security company G4S lost 1.6%, following a report in the Financial Times newspaper that a British government-funded watchdog will investigate its activities in Israel and the Palestinian territories.
In the broader market FTSE 250, shares in the estate agency chain, Foxtons, lost more than 6%, after it announced that its chief executive Michael Brown was to stand down. He'll be replaced by the company's chief operating officer, Nic Budden.