The FTSE 100 slumped in early trading on Thursday with heavyweight stocks AstraZeneca, Diageo, Shell and Vedanta providing a drag after disappointing the market with results.
Stocks were also tracking US and Asian markets lower after yesterday's news that the US contracted in the fourth quarter of 2012. The world's largest economy shrank by 0.1% in the last three months of last year, a stark contrast to the 3.1% growth seen in the third quarter. Forecasts were for a 1.1% expansion.
Meanwhile, the Federal Open Market Committee said last night in its January statement that it would keep rates unchanged and continue to purchase securities at a $85bn-a-month pace.
The Fed said "with appropriate policy accommodation, economic growth will proceed at a moderate pace". Policy-makers also expect the jobless rate to "gradually decline" towards levels constant with its mandate.
Analyst Michael Gapen from Barclays Research said: "Given the ongoing volatility in economic activity, fiscal policy driven uncertainty, and the desire to see a substantial and sustained improvement in labor market conditions, we continue to expect that the Fed will purchase assets through year-end, with some tapering of the rate of purchases in the second half of the year if growth and labour markets improve in the third and fourth quarter as we expect."
Markets digest barrage of earnings
Pharma titan AstraZeneca was a heavy faller this morning after reporting that full-year revenue fell 15% due to a loss of exclusivity on several brands.
Consumer goods giant Diageo was in the red despite posting profits in line with market expectations. The Guinness, Smirnoff and Johnnie Walker owner reported a 9.0% organic operating profit growth for the half year ended December 31st.
Oil giant Royal Dutch Shell was lower after full-year profits slipped slightly as a result of oil price
A third-quarter production report from Vedanta disappointed despite the company saying that oil and gas output rose 21% and mined metal and silver increased strongly.
Leading the risers was Kazakh copper-focused miner Kazakhmys which said that it had hit production targets across all asset classes in 2012.
Broadcaster and broadband group BSkyB gained after beating profit forecasts in the first half, helped by a surge in customer numbers. The firm also hiked its dividend by a fifth.
Engineering firm Babcock edged higher after saying it has traded well in first half and is confident of meeting expectations for the full year.
Utilities group SSE rose after saying that it is on course to deliver increases in both adjusted profits and its dividend this year despite a slight fall in the number of customer accounts during the first nine months.
FTSE 100 - Risers
Kazakhmys (KAZ) 751.50p +2.11%
British Sky Broadcasting Group (BSY) 824.50p +1.79%
Rolls-Royce Holdings (RR.) 952.50p +1.06%
CRH (CRH) 1,360.00p +1.04%
Petrofac Ltd. (PFC) 1,631.00p +0.99%
SSE (SSE) 1,429.00p +0.92%
Babcock International Group (BAB) 1,041.00p +0.87%
Severn Trent (SVT) 1,635.00p +0.74%
Amec (AMEC) 1,082.00p +0.56%
United Utilities Group (UU.) 744.00p +0.54%
FTSE 100 - Fallers
AstraZeneca (AZN) 3,023.00p -4.11%
Antofagasta (ANTO) 1,142.00p -2.31%
Aberdeen Asset Management (ADN) 400.50p -1.60%
Royal Dutch Shell 'B' (RDSB) 2,326.50p -1.50%
Royal Dutch Shell 'A' (RDSA) 2,273.50p -1.39%
Royal Bank of Scotland Group (RBS) 343.10p -1.18%
Barclays (BARC) 298.60p -1.13%
Kingfisher (KGF) 271.00p -1.06%
Prudential (PRU) 963.00p -1.03%
Marks & Spencer Group (MKS) 379.50p -0.94%
FTSE 250 - Risers
Lonmin (LMI) 337.20p +7.05%
Mitchells & Butlers (MAB) 311.10p +5.10%
JD Sports Fashion (JD.) 769.50p +4.77%
BTG (BTG) 333.30p +3.99%
Centamin (DI) (CEY) 57.00p +2.52%
Bumi (BUMI) 345.00p +1.77%
ITE Group (ITE) 257.90p +1.74%
William Hill (WMH) 388.00p +1.49%
Unite Group (UTG) 279.00p +1.20%
Bank of Georgia Holdings (BGEO) 1,265.00p +1.20%
FTSE 250 - Fallers
Enterprise Inns (ETI) 92.05p -6.74%
Investec (INVP) 457.00p -2.75%
Telecom Plus (TEP) 950.00p -2.31%
Afren (AFR) 141.80p -2.27%
Imagination Technologies Group (IMG) 486.80p -2.23%
Jupiter Fund Management (JUP) 318.80p -2.12%
Brewin Dolphin Holdings (BRW) 210.00p -2.10%
Savills (SVS) 490.00p -1.76%
Henderson Group (HGG) 154.60p -1.53%
Heritage Oil (HOIL) 200.90p -1.52%