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The much anticipated news conference from the US Federal Reserve’s chairman Ben Bernanke, following a meeting of the Federal Open Market Committee, spooked investors late Tuesday (post UK market close). GDP growth in the US was revised down to between 2.7 - 2.9% for 2011, from the 3.1 - 3.3% predicted in April. Whilst Bernanke suggested high oil and food prices were temporary, he admitted that unemployment would remain high throughout 2011. He also conceded the problems in the housing market and financial sector “may be stronger and more persistent than we first thought”.

Locally, Go-ahead Group, the UK’s leading transport operator, released a positive trading update ahead of its September 1st2011 full year results. Keith Ludeman, CEO, stated improving levels of quality, improved marketing and increased costs to motorists as contributions to the anticipated delivery of full year operating profits.

The news led analysts at Investec to upgrade the stock, stating that the quality business was attractively priced and offered a significant prospective dividend. The company ended the day 0.26% higher at 1516p.

The risk-off sentiment persisted throughout the day and resulted in the UK blue chip index closing down 1.7% at 5674, fairing slightly better than its European counterparts. The flight to safety saw the dollar strengthened by 1.3% against the euro and 0.5% against sterling at market close.

Brent Crude was crushed by over 5%, partly as a result of the risk-off trade and news that the US will release 30m bbls of its petroleum stockpile (as part of a wider 60m bbl drive by the International Energy Agency) to suppress oil prices.

This was posted in Bdaily's Members' News section by John Dance .