FTSE 100 has Monday blues as traders on Fedwatch

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UK shares had the Monday blues and FTSE 100 was down 1.44% to 6,679.

The downbeat mood followed on from US stocks plummeting on Friday and a weak performance in Asia overnight. The S & P500 in New York lost 2.45% on Friday as investors fretted over a possible rate rise on September 21.

The Nikkei 225 in Japan shed 1.73% to stand at 16,672.

Traders are also wary ahead of more Fed comment later. Three speakers are due to comment, including Fed governor Lael Brainard.

In UK small caps, the mood was also downbeat. The FTSE AIM All shares lost 0.39% to 802.270, while the FTSE AIM 100 lost 0.53% to stand at 3,785.

The big laggard on Footsie was Primark owner Associated British Foods plc (LON:ABF), which lost almost 5% to 2,999p, despite it reavealing that the fall in the pound after the UK referendum had boosted Primark and British Sugar owner Associated British Foods plc (LON:ABF).

ABF said annual earnings per share would be slightly ahead of those a year ago due to better-than-expected second half trading and the further weakening of sterling since the June 23 vote.

On the riser front, brewer SABMiller (LON:SAB) added 0.22% to stand at 4,393p after it received some positive analyst comment.

In small caps, Xcite Energy (LON:XEL) plunged over 73% to 2.2p as it updated on the process of refinancing the E & P, which owns the Bentley heavy oil field in the North Sea.

It is restructuring its $135mln senior secured bonds after the shares rose sharply at the end of last week.

Xcite, which has been in talks with its bondholders since June about a possible restructuring, had set a deadline of September 30 for the repayment of outstanding bonds.

It has been in talks with principal bondholders over a potential restructuring of the bonds, and announced an extension to the maturity of the bonds until September 30 this year.

Techfinancials plc (LON:TECH) on the other hand, saw shares lifted over 15% to 15 a pop as it swung strongly into profit following as its consumer business recovered after restructuring.

Profits for the half year to June came in at US$1.25mln against a small loss last time, while revenues jumped by 34% to US$9.86mln.

The Israeli company had already flagged trading had been good in an update last month and it confirmed today both arms of the business had seen strong growth.

The FTSE 100 plummeted 88 points at open this morning to 6,688.

The top winner wasSABMiller (LON:SAB) was up 0.15% to 4,390p, after a number of broker upgrades.

The biggest loser was BHP Billiton (LON:BLT), down 5% to 966.5p.

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The FTSE 100 is set to open sharply lower amid worries that the US Federal may be ready to hike interest rates with the index of blue chip shares predicted to fall 90 points to 6,686.95.

Comments by Boston Fed chief Eric Rosengren seemingly supportive of rise in lending rates led to a late sell-off on Wall Street as bond yields strengthened.

That in turn hit Asia's main markets Monday, with China, Japan and Australia off between 1.9-2.2%.

'My personal view, based on data that we have received to date, is that a reasonable case can be made for continuing to pursue a gradual normalisation of monetary policy,' Rosengren told the South Shore Chamber of Commerce in Quincy, Massachusetts.

Back here in the UK, the main scheduled corporate news comes from Associated British Foods, owner of the silver spoon sugar brand, and of course the clothes chain Primark.

Analysts expect the numbers for ABF's retail arm to be affected by the rather indifferent summer weather.

*Brent crude 72 cents lower at US$47.29.

*Gold 80 cents higher at US$1,331.50.

City headlines

*New Age, an Africa-focused oil explorer backed by Och-Ziff, the US hedge fund, is considering an initial public offering that would put it among the UK's biggest independent oil companies by market capitalisation – FT.

*Large shareholders in Lloyds Banking Group are calling on the high street lender to strengthen its internal succession plan and address a perceived overreliance on chief executive António Horta-Osório – FT.

*Two of Britain's biggest water companies, Yorkshire Water and Kelda Water Services, are poised to announce a major new tie-up to tap the £4bn business supply market before it opens up to competition next year – Telegraph.

*A nuclear power station being built in France using the same design earmarked for Hinkley Point in Somerset may have to restrict its output or could be abandoned because of the costs of correcting safety flaws, experts have warned – Times.

*Shareholders in Premier Farnell, the British electronics maker behind the Raspberry Pi computer, are expected to back US company Avnet's £868 million takeover offer on Monday in a further sign that Britain's technology scene is a ripe target for overseas buyers – Telegraph.

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