FTSE finishes lower in choppy session as Darling fails to shock

Joshua Raymond, Market Strategist at City Index commented: "The FTSE 100 finished the day in negative territory for a third straight day after the Pre Budget Report failed to shock and investors moved their focus towards tomorrows MPC rate announcement.

Trading has been fairly choppy today and there has been a distinct lack of direction. Yesterday's losses seem excessive and clearly low volumes had an effect on exacerbating moves lower. However, we have not seen investors come in looking to use these falls as another buying opportunity yet and this is what is needed if we are to attack the 5400 level again.

Equity markets shrug off PBR

The Pre Budget Report showed no real surprises to wider financial markets with revised GDP estimates largely expected. The headline will inevitably be regarding the banker's bonus tax. However any impact upon banking equities was minimal with the story being leaked fairly early and investors having digested the news already. From a FTSE 100 perspective there seems nothing really new to tell from Darling's pre budget and as such equities were left largely unchanged.

Sterling weakens to 8 week lows

We did however see lots of activity in sterling as invested digested the pre budget speech. We initially saw sterling move higher with the market happy to hear that there would be no windfall tax on banks profits. However, the revisions higher for UK borrowing levels caused investors to move their money out of sterling which forced the sterling /dollar rate to its 8 week lows as a result.

Investors are now switching their focus to tomorrow's MPC rate decision and whether there are any signs of an exit strategy from quantitative easing.

Energy firms weigh - Miners advance

Energy firms have been weighing on the Index today with both BP and Shell lower after crude oil prices reached a new 8 week low before prices recovered in the afternoon session.

The miners have been in demand however and have helped to minimise today's losses on the FTSE 100 with Copper prices rallying on the back of the weaker US Dollar. The mining sector has fallen over 7% in the last week and so inevitably we have seen some bargain hunting today with Xstrata and Rio Tinto both in high demand.

Segro in demand

European property firms made some strong gains on the back of a positive note from JP Morgan. Investors have reacted well to the broker upgrading its stance on Segro to neutral from underweight and increasing its price target by 7% to 360p. As a result, Segro shares lead today's FTSE gainers, rallying over 4%."

For more information, visit cityindex.co.uk.