FTSE retreats 2% as UK follows global pullback

The FTSE 100's long-running rally has been brought to a dramatic close this morning, with the index shedding 133 points in early trading as fears over an end to the US quantitative easing programme spook investors.

Having risen to a fresh 12-year closing high of 6,840 yesterday, the blue chip index fell back 2% to 6,707 this morning, with only three of its 100 constituents in the black. The widespread sell-off followed the 7.3% plunge in Japan's Nikkei overnight, prompted by Federal Reserve chairman Ben Bernanke's comments that US QE could begin to ‘taper' if the economy continues to improve. Equity markets across Europe gave up some of their recent gains, with indices in Germany, France, Spain and Italy all down by over 2%. It was a similar picture in Asia overnight, as markets retreated fol...