A budget deal in Washington signed on Tuesday night was met with a mixed reaction on markets yesterday. While the agreement looks to ease spending cuts over the next two years and reduces the potential for political brinkmanship, many believe that it removes yet another obstacle standing in the way of the Fed’s decision to taper following the strong labour-market figures out last week.

The FTSE 100 was trading around 6,481.31 early on, down 0.41% on the day; it has not closed below this level since October 10th when it finished at 6,430.49. This follows a sharp sell-off across US and Asian markets overnight.

“The negative market sentiment is caused by fears that the US budget deal will be the final sign the Fed needs to start tapering the $85bn [monthly] bond purchasing as early as December, spooking investors into pulling their money out of equities,” said Alex Conroy, Financial Sales Trader at Spreadex.

Economic data from the States will be closely watched today, particularly the release of jobless claims numbers for the week ended December 7th. The consensus forecast is for a pick-up to 320,000, from 298,000 the week before.

Sportswear and equipment retailer Sport Direct slumped early on despite delivering a near-17% jump in underlying profits during its first half, driven by an increase in online and international sales. However, the company did say that “[current] trading has now reverted to management’s original expectations” following the outperformance in the first half.

Energy services firm Wood Group disappointed with a pre-close trading update this morning after saying that trading remaining mixed across its three main divisions. Nevertheless, it reiterated guidance for “good growth” in 2013. Sector peers AMEC and Petrofac fell in sympathy.

Imagination Technologies was a high riser on the FTSE 250 today, bouncing slightly after a steep fall on Wednesday following its first-half results, in which it warned of slowing growth in the high-end smartphone market. The stock this morning was upgraded by Liberum Capital to ‘buy’.

Fashion retailer SuperGroup was lower after a strong first-half report as it warned that comparatives for the third quarter “are more challenging than those experienced so far this year”.

Transport group Go-Ahead gained after saying it expects full-year results to come in a touch above previous expectations as after strong first half.

FTSE 100 – Risers
Standard Chartered (STAN) 1,307.00p +1.28%
Antofagasta (ANTO) 767.50p +0.92%
Rio Tinto (RIO) 3,239.00p +0.79%
Sainsbury (J) (SBRY) 391.00p +0.77%
United Utilities Group (UU.) 647.50p +0.47%
Morrison (Wm) Supermarkets (MRW) 262.30p +0.42%
International Consolidated Airlines Group SA (CDI) (IAG) 370.20p +0.33%
Associated British Foods (ABF) 2,270.00p +0.22%
Glencore Xstrata (GLEN) 305.50p +0.18%
Hammerson (HMSO) 496.80p +0.08%

FTSE 100 – Fallers
Sports Direct International (SPD) 742.50p -3.70%
Amec (AMEC) 1,073.00p -2.81%
Petrofac Ltd. (PFC) 1,159.00p -2.52%
Mondi (MNDI) 921.50p -2.07%
Royal Bank of Scotland Group (RBS) 320.50p -1.96%
Aberdeen Asset Management (ADN) 456.00p -1.94%
Randgold Resources Ltd. (RRS) 3,974.00p -1.90%
Smith & Nephew (SN.) 825.50p -1.78%
Aggreko (AGK) 1,534.00p -1.67%
Melrose Industries (MRO) 283.80p -1.59%

Source: ShareCast