Market update: European markets lower after Fed hints at end to asset purchases – 20.06.2013

Source: Henderson Global Investors

The US markets were both down at the close on Wednesday, after the Federal Reserve chairman acknowledged that there would be a moderation in the pace of asset purchases later this year if the economy goes as expected, however, interests rates were held at a record low level of between zero and 0.25% (Dow Jones -1.4% and S&P 500 -1.4%). The day saw two major communications companies in the US, Verizon and AT&T, take their place in the top 5 losers (-2.9% and -2.5% respectively). It was not all bad news for the US economy, as the Fed announced it expects the US economy to grow between 2.3% and 2.6% in 2013.

In Europe, the markets are slightly down at the time of writing (FTSE Eurofirst 300 -1.6% and FTSE 100 -1.6%). The fall in markets came just hours after the Prudential Regulation Authority (PRA) revealed that Britain’s top banks and building societies need to fill a £27.1bn hole in their balance sheets. Markets were also affected by the Fed’s plans to wind down their economic stimulus measures. Mining stocks are dominating the loser board, showing fresh signs of a slowdown in China, the world’s biggest metal consumers.