Yesterday's unsurprising decision to leave US interest rates on hold has knocked activity in the UK ...
Yesterday's unsurprising decision to leave US interest rates on hold has knocked activity in the UK stock market this morning, and damaged hopes of a recovery in Asia.
Federal Reserve policy makers yesterday said weak growth is a bigger threat to the economy than inflation, so left its interest rate unchanged at 1.75%.
The FTSE 100 Index dropped 80.80 points or 1.9% to 4190.90, led by Hilton Group, Europe's second-largest hotel company by rooms, which fell 18p or 9.3% to 175p.
Dixons, Britain's largest consumer-electronics retailer, dropped 7.75p or 4.8% to 154.75p, and Compass Group, the world's largest caterer, declined 18.75p or 6.4% to 275p.
In the US, General Electric led the Standard & Poor's 500 index to its second straight decline. Makers of airplanes and aviation equipment, including Boeing Co. and United Technologies, slid after AMR Corp's American Airlines said it will pare its aircraft fleet because of a travel slump.
The S&P 500 fell 19.59 points or 2.2% to 884.21 while the Dow Jones Industrial Average slumped 206.50 points or 2.4% to 8482.39 and the Nasdaq shed 37.56 points or 2.9% to 1269.28.
Boeing, the world's biggest planemaker, fell $3.27 to $37.23 and Honeywell International, the largest maker of cockpit controls, slid $2.44 to $30.20.
General Electric, which makes jet engines and owns and leases aircraft through its GE Capital unit, fell $1.30 to $30.95 and American International Group, which leases aircraft through its International Lease Finance Corp, also dropped $3.20 to $62.31.
In the Asian markets, Japanese stocks were hit by the Federal Reserve's decision to maintain the interest rate. This could now falter a recovery in Japan's biggest export market, so companies that rely on overseas sales, such as Honda Motor, led the decline.
The Nikkei 225 Stock Average dropped 0.5% to 9638.41, while the Hong Kong's Hang Seng Index shed 1.6% thanks to Li & Fung and other companies which also ship goods to the US.
Taiwan's TWSE Index gained 1.4%. MediaTek advanced after the island's second-largest chip designer said second-quarter profit almost doubled.
And South Korea's Kospi index gained 0.4%, while indices fell in Australia, Singapore, Indonesia, New Zealand, Malaysia and India, and rose in Thailand, the Philippines and China.
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