LONDON: Britain's top share index turned lower by mid-session on Wednesday as losses in grocers and caution before a Federal Reserve announcement later in the day weighed on the market.
The blue-chip FTSE 100 closed 0.4 percent lower at 6,680.55 points. The FTSE, which fell to its lowest since late January on Tuesday, has lost around 5.5 percent over the past three weeks as investors worried about a Greek default and rising borrowing costs if the Federal Reserve raises its interest rates.
A Fed policy statement, due at 1800 GMT, will spell out how the bank's policymakers feel the U.S. economy has progressed and hint at whether the Fed intends to hike rates only once this year, or twice.
"It (Wednesday's pullback) is quite in keeping with the general mood of caution," Ken Odeluga, market analyst at City Index, said. "I think we're going to know a lot more (about market direction) after the Federal Reserve announcement today."
Among individual stocks, supermarkets, Morrison, Marks and Spencer and Tesco all fell around 1 percent after bearish comments on grocers by Credit Suisse.
"We see few opportunities within a group that has historically misallocated capital, is faced with extreme competitive pressures and operates in a very low-growth environment," Credit Suisse analysts said in a note.
Mid-cap housebuilder Berkeley surged 10 percent after posting better-than-expected full-year profit. Peers Persimmon, Wolseley , CRH, Travis Perkins and Barratt Developments also outperformed.
Persimmon is up over 20 percent since the Conservatives won an unexpected majority at a general election in May. Traders expect more measures to support the housing market, with the notion of the "mansion tax" promoted by the opposition Labour party now having receded.
"Berkeley's figures have set the tone for the sector, and they're pretty impressive when one stock in the sector charges higher like this, the others are bound to follow," Alastair McCaig, market analyst at IG, said.
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