The FTSE 100 bounced back this afternoon after a sell-off yesterday, with leading shares recovering from falls amid fresh hopes for a resolution to the crisis in Portugal.
Markets across Europe fell deep into the red today as the Portugal crisis worsened and investors reacted to a big sell-off in China overnight.
Some mid-cap managers are allocating nearly 40% of their funds to stocks outside the FTSE 250, leading to a dip in performance as the index rallied over the last six months.
The FTSE 100 has continued to sell off in early trading on Monday following further falls in Asia, as investors continue to dump stocks on fears QE will be withdrawn in the US.
The FTSE 100 has halted its two-day slide as investors buy back into equities following yesterday's sharp sell-off, with Lloyds and other financials leading the pack.
The FTSE 100 has slumped 3%, gold has dropped 5% and gilt yields have spiked to their highest level in over a year as the prospect of an end to US QE rattles markets.
US markets followed shares across Europe higher overnight, while the dollar also surged, ahead of the latest Federal Reserve meeting in the States which may map out a QE exit strategy.
Equity income stocks could be among the biggest losers from an environment in which investors prepare for a tapering of US QE, investors have warned.