FTSE down amid investor fears

The FTSE 100 Index maintained its positive start to the week

Investors took shelter in defensive stocks amid uncertainty over the outcome of rate-setting meetings in London and Frankfurt.

The FTSE 100 Index was down 21 points at 5086.9 by mid-morning as the top flight followed Asian markets lower on a busy day for corporate news.

On Wednesday night, the US Federal Reserve said interest rates would remain at record lows for an extended period, adding to doubts over a sustainable recovery.

The prospect of monthly announcements from the Bank of England and European Central Bank kept investors on the sidelines in morning trading, with most analysts expecting policymakers in London to keep interest rates at 0.5% but to pump an extra £50 billion into the UK economy.

Telecoms firm Cable and Wireless led the fallers board, down 7% or 10.5p to 137.5p after plans to demerge its UK business were overshadowed by the firm downgrading earnings guidance for its Caribbean arm this year.

Vodafone in contrast was one of the Footsie's top risers, adding 1.85p to 137.85p as investors moved into more defensive sectors ahead of possible volatility later in the session. BT Group, which is due to announce interim results next week, climbed 2.6p to 136.2p.

In the retail sector, Tesco surged 7.75p to 416.75p and Marks and Spencer rose another 2.9p to 364.4p as it continued to benefit from Wednesday's better-than-expected results.

Among other so-called safer stocks, British American Tobacco and Imperial Tobacco added 26.5p to 1943.5p and 19p to 1810p respectively.

Broadcaster ITV meanwhile was the top riser in the FTSE 250 following a trading update. It added 2.86p to 47.39p or 6% after it forecast a 4% rise in net advertising revenues in December and said it continued to beat BBC1 in terms of peak-time audience share.