Following a 150-point surge over the last two days, the FTSE 100 pulled back in early trading on Friday following the release of the minutes of the latest Federal Reserve meeting last night.
While there was a clear majority in favour of further asset purchases (the third round of quantitative easing, or QE3), Federal Open Market Committee (FOMC) members were divided on the timing of these purchases.
The support for how long the programme should run "isn't as solid as previously thought with some Fed members feeling rather uncomfortable for the Fed buying bonds beyond mid 2013," explained Markus Huber, the head of German HNW trading at ETX Capital.
He said that, while it isn't a surprise, there is also talk that US Treasury Secretary Timothy Geithner may step down at the end of the month despite an upcoming deadline to deal with the debt ceiling, "potentially causing an increase in uncertainty which could weigh on markets at a later stage once these talks [over the ceiling] are actually confirmed," Huber said.
Markets will be keeping a close eye on the US today ahead of the release of unemployment figures. Consensus expectations are for a 145,000 gain in non-farm payrolls in December, similar to the 146,000 rise seen the month before. The jobless rate is forecast to remain unchanged at 7.7%.
BP gains after Transocean settlement
Deepwater Horizon rig owner Transocean has reached a $1.4bn settlement with the Department of Justice, causing shares
in operator BP to rise early on this morning. Transocean, the world's largest offshore drilling contractor, agreed yesterday to plead guilty to one misdemeanour violation of the Clean Water Act for "negligent discharge of oil into the Gulf of Mexico".
Nevertheless, the wider resource sector was under the weather in the opening hour, with Fresnillo, Randgold, Petrofac and Polymetal all registering losses. Fresnillo was the heaviest faller after UBS cut its recommendation for the shares to 'neutral'.
Sector peer Anglo American was also in the red after agreeing to sell its 70% interest in the Amapá iron ore mine in Brazil. The terms of the deal with Zamin Ferrous are confidential and subject to state regulatory approval, but the company said it was expected to complete in 2013.
Real estate investment trust Hammerson was dampened by Credit Suisse after the broker downgraded its rating for the stock to 'neutral'.
Power systems giant Rolls-Royce fell despite revealing that it is to provide repair and support services for aircraft engines operated by the US Marine Corps and Air Force as part of a contract worth $52.2m.
Balfour Beatty, the FTSE 250 global infrastructure group, was also lower despite saying that it has been awarded a five-year highway maintenance contract by Wiltshire Council.
FTSE 100 - Risers
BP (BP.) 446.70p +1.13%
British American Tobacco (BATS) 3,158.00p +1.09%
Reckitt Benckiser Group (RB.) 3,962.00p +0.58%
Standard Life (SL.) 348.20p +0.52%
Experian (EXPN) 1,020.00p +0.49%
Centrica (CNA) 338.40p +0.48%
Royal Dutch Shell 'B' (RDSB) 2,205.00p +0.39%
Vodafone Group (VOD) 158.00p +0.38%
ARM Holdings (ARM) 799.00p +0.38%
Royal Dutch Shell 'A' (RDSA) 2,147.00p +0.37%
FTSE 100 - Fallers
Fresnillo (FRES) 1,788.00p -5.15%
Randgold Resources Ltd. (RRS) 6,030.00p -3.21%
Polymetal International (POLY) 1,190.00p -2.38%
Petrofac Ltd. (PFC) 1,642.00p -1.85%
Marks & Spencer Group (MKS) 381.30p -1.83%
Anglo American (AAL) 1,987.00p -1.37%
Antofagasta (ANTO) 1,352.00p -1.31%
Hammerson (HMSO) 490.90p -1.25%
Evraz (EVR) 277.40p -1.14%
Johnson Matthey (JMAT) 2,336.00p -1.14%
FTSE 250 - Risers
Raven Russia Ltd (RUS) 63.90p +2.08%
Cranswick (CWK) 868.00p +1.52%
Dechra Pharmaceuticals (DPH) 617.00p +1.40%
Galliford Try (GFRD) 765.00p +1.39%
Bovis Homes Group (BVS) 589.00p +1.20%
Hiscox Ltd. (HSX) 459.00p +1.19%
Howden Joinery Group (HWDN) 173.40p +1.11%
Big Yellow Group (BYG) 366.50p +0.99%
Betfair Group (BET) 690.00p +0.95%
Hansteen Holdings (HSTN) 80.65p +0.94%
FTSE 250 - Fallers
Petropavlovsk (POG) 365.20p -2.64%
Enterprise Inns (ETI) 101.50p -2.40%
African Barrick Gold (ABG) 446.90p -2.36%
Heritage Oil (HOIL) 193.20p -2.08%
Invensys (ISYS) 327.50p -1.95%
Bumi (BUMI) 270.60p -1.60%
Lonmin (LMI) 291.80p -1.55%
Perform Group (PER) 388.50p -1.42%
Supergroup (SGP) 550.50p -1.26%
Elementis (ELM) 228.60p -1.25%