Markets tumble as Fed Twists

Operation Twist - the Federal Reserve's latest attempt to boost economic growth in the US - sent markets globally tumbling overnight, with major indices in the US and Asia shedding up to 3%.

At the end of a two-day policy meeting the Fed announced it would not be unleashing a third bout of asset purchasing, and will instead sell around $400bn (£253bn) worth of bonds maturing within three years. It will swap these bonds for longer-term securities in an effort to keep interest rates lower for longer.

However, the action spooked markets, with the Dow Jones closing down almost 300 points, or 2.5%, lower at 11,124 while the S&P 500 lost 2.9%, falling to 1,166.76.

Asia's Shanghai and Hang Seng indices were also hit, plunging 2.8% and 4.3% respectively while the Nikkei 225 was down 2.1%.

Oil prices also fell on the news, with Brent crude down 18 cents a barrel at just over $110.

The FTSE 100 is also expected to open lower this morning after a 1.4% loss yesterday - it closed at 5,288.41.