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Bearish Mood in the UK & Europe

WEDNESDAY MARKET UPDATE: The benchmark FTSE 100 index took a 1.1% dive, with mining companies digging deep into the red 

Alanna Petroff 14 November, 2012 | 6:36PM Rouhan Sharma

A bearish, downbeat mood pervaded the markets on Wednesday, causing major UK and European indices to stage significant declines. Market observers were quick to blame the sour market mood on worries over the eurozone, widespread anti-austerity strikes and the US fiscal cliff.

Meanwhile, the Bank of England's cut to its growth forecast for the UK economy did not help matters.

"Equities were already in negative territory before Sir Mervyn King spoke today, and after he cut the Bank of England's UK growth forecast for next year to 1%, they continued on their downhill journey," explained David Madden, a market analyst at IG.

"Ordinarily any hint of more quantitative easing (QE) would send stocks higher, but today's suggestion was shrugged off by investors - it's almost like markets are now immune to QE," he said. "Meanwhile, rising Portuguese unemployment and higher Spanish bond yields have helped to push European benchmarks into the red."

The FTSE 100 index closed at 5,722, after falling by 64 points, or 1.1%. The FTSE 250 index also dropped by 79 points, or 0.7%, to close the day at 11,719.

The main companies dragging down the FTSE 100 on Wednesday were miners, with shares in EVRAZ (EVR) dropping by 7%. Shares in Randgold Resources (RRS) and Eurasian Natural Resources (ENRC) also followed close on the heels of EVRAZ, falling by roughly 5% each.

Click here to see which specific companies moved ahead and which companies fell behind in daily London trading.

With notes from Rouhan Sharma, an assistant site editor for Morningstar.com based in Mumbai, India.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
EVRAZ PLC91.10 GBP0.00-
Randgold Resources Ltd4,718.00 GBX0.36-
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.