eavy falls from industrial stocks and travel companies saw the FTSE 100 fall 0.3 per cent to 6,475 in early trading.

European stocks fell on Tuesday after the World Bank downgraded its growth forecast for the global economy and industrial production data from Germany showed a worse-than-expected decline.

US indices also declined, with the S&P 500 dropping to an eight-week low, with investors showing caution ahead of third-quarter earnings reporting, which unofficially kicks off after the close on Wednesday with results from aluminium giant Alcoa.

Investors were also awaiting the minutes of the latest Federal Open Market Committee (FOMC) meeting amid speculation about when the first hike in interest rates will come after the of quantitative easing (QE).

“With QE set to end at the end of this month tonight’s FOMC minutes could well be instructive with respect to the Federal Reserve’s thinking on the trajectory of monetary policy in the coming months,” said analyst Michael Hewson from CMC Markets UK.

Speaking in New York on Tuesday, the head of the New York Federal Reserve said that forecasts for a mid-2015 rate hike are “reasonable”. William Dudley said: “The consensus view is that lift-off will take place around the middle of next year. That seems like a reasonable view to me.”

Industrials, travel stocks provide a drag

Engineering and industrial names such as GKN, Johnson Matthey, IMI and Weir Group were among the worst performers in early deals on the FTSE 100 as fears about global growth weighed on sentiment.

Airlines and travel tour operators were also under pressure as the threat of an Ebola outbreak in Spain spread fear amongst investors. Easyjet, IAG, Carnival and TUI Travel were all trading in the red.

Supermarket group Tesco was continuing to bounce back after recent weakness with HSBC providing a lift after upgrading the stock from ‘neutral’ to ‘overweight’. The bank said that much of the recent bad news is already discounted in the stock price.

Rivals J Sainsbury and Wm Morrison were also on the rise.

Bus and train operator FirstGroup was lower after failing to keep its Scotrail franchise from April next year. The group has already lost its First Capital Connect London commuter franchise and failed in a bid to run London-Scotland sleeper trains.

The share price of AIM-listed oil explorer Oilex sank sharply after the company reported delays at one of its wells on the Cambay field in the Gujarat State of India.

FTSE 100 – Risers
Tesco (TSCO) 189.00p +3.50%
Sainsbury (J) (SBRY) 234.10p +1.69%
Morrison (Wm) Supermarkets (MRW) 161.20p +1.19%
HSBC Holdings (HSBA) 635.20p +0.70%
Travis Perkins (TPK) 1,623.00p +0.56%
SSE (SSE) 1,518.00p +0.53%
Next (NXT) 6,600.00p +0.53%
Pearson (PSON) 1,191.00p +0.34%
Friends Life Group Limited (FLG) 305.00p +0.30%
Unilever (ULVR) 2,523.00p +0.28%

FTSE 100 – Fallers
GKN (GKN) 293.20p -3.99%
easyJet (EZJ) 1,345.00p -3.17%
Ashtead Group (AHT) 947.00p -3.07%
Johnson Matthey (JMAT) 2,818.00p -1.95%
IMI (IMI) 1,154.00p -1.95%
Carnival (CCL) 2,285.00p -1.85%
Aggreko (AGK) 1,482.00p -1.79%
Anglo American (AAL) 1,350.50p -1.78%
Tullow Oil (TLW) 590.00p -1.75%
Experian (EXPN) 938.50p -1.68%

Source: ShareCast