London open: Banks lead markets lower ahead of FOMC meeting

Following a strong start to the week, investors turned cautious ahead of the conclusion of the Federal Open Market Committee (FOMC) meeting tomorrow afternoon as markets ready themselves for one of the most closely-watched US policy decisions in recent years, given rising expectations that the Fed will begin to scale back its quantitative easing (QE) programme.The FTSE 100 was registering small losses early on, retreating from Monday's close of 6,622.86 - this was the best close for London's benchmark index since August 2nd, when it finished the day at 6,647.87."The two-day event is certain to install some trepidation in investors with the majority of economists surveyed of the belief that Fed policymakers will cut monthly bond buying by $10bn to $75bn per month," said Financial Sales Trader Max Cohen from Spreadex.Markets across the globe gained on Monday after the announcement by well-known hawk Larry Summers that he has dropped out of the race to take over Ben Bernanke's position as Fed Chairman when he steps down in January. Cohen said that Summers would have tightened policy more than Fed Vice Chair Janet Yellen, who is now widely regarded as the firm favourite to succeed Bernanke.He said: "many analysts point out that (interest) rate-hike expectations are of fundamental importance because of their impact on short-term US bond yields and thereby the dollar's yield attraction. A faster pace of rate increases would make the dollar more attractive given that many other central banks, such as the European Central Bank and the Bank of Japan, are perceived to be nowhere near tightening."FTSE 100: Lloyds falls as government begins stake saleBanking group Lloyds was in the red this morning after the UK Financial Investments sold a 6% stake in the bank for £3.2bn, reducing its shareholding from about 38.7% to approximately 32.7%. The Treasury sold 4.3bn shares at a price of 75p each. Part-nationalised peer RBS was also lower early on.Barclays was also lower after it was reported yesterday that it is facing a £50m fine for allegedly breaching market listing rules over its capital raisings. The bank also said that its adjusted income for July and August was lower than in the same period of the previous year, resulting in a 5% year-on-year decline in adjusted income for the eight-month period to August 31st.Mining stocks were also out of favour as risk appetite was scaled back ahead of the Fed decision - Vedanta Resources, Glencore Xstrata, Rio Tinto and Anglo American were among the FTSE 100's worst performers . Glencore Xstrata was being weighed down by UBS which lowered its rating from 'buy' to 'neutral', saying that a "challenging" price outlook will cap share-price performance.Randgold however bucked the trend as gold prices rebounded after hitting a five-week low the day before.FTSE 250: Debenhams rises after pre-close statementDebenhams was a high riser after saying it expects annual pre-tax profit in line with market forecasts on the back of growth in market share and like-for-like sales. In a trading update ahead of results for the year to end of August, the retailer reported a 2% rise in group like-for-like sales supported by online revenue and market share gains in clothing and non-clothing such as womenswear and beauty.Crest Nicholson, the housebuilder which debuted on the stock market back in February, edged higher after reservations in the third quarter were given a boost by the government's stimulus measures as it gave a confident outlook for the future. Domino Printing fell after it warned that market conditions have continued to remain "difficult" in many regions, and in some areas it has seen signs of possible deterioration. FTSE 100 - RisersSmiths Group (SMIN) 1,390.00p +1.24%United Utilities Group (UU.) 694.50p +1.02%Rolls-Royce Holdings (RR.) 1,117.00p +0.99%Bunzl (BNZL) 1,378.00p +0.95%Severn Trent (SVT) 1,774.00p +0.91%Schroders (SDR) 2,524.00p +0.88%Randgold Resources Ltd. (RRS) 4,525.00p +0.87%National Grid (NG.) 752.00p +0.80%Burberry Group (BRBY) 1,614.00p +0.75%Diageo (DGE) 2,027.50p +0.75%FTSE 100 - FallersVedanta Resources (VED) 1,151.00p -2.71%Royal Bank of Scotland Group (RBS) 357.00p -2.59%Glencore Xstrata (GLEN) 334.45p -2.18%Lloyds Banking Group (LLOY) 75.71p -2.13%Aggreko (AGK) 1,621.00p -1.70%Anglo American (AAL) 1,559.50p -1.48%Serco Group (SRP) 566.00p -1.48%Barclays (BARC) 301.25p -1.36%Standard Chartered (STAN) 1,490.00p -1.32%BG Group (BG.) 1,192.00p -1.20%FTSE 250 - RisersDebenhams (DEB) 106.00p +2.71%Bumi (BUMI) 214.20p +2.24%Salamander Energy (SMDR) 127.00p +1.76%Stagecoach Group (SGC) 335.90p +1.70%Go-Ahead Group (GOG) 1,592.00p +1.66%Crest Nicholson Holdings (CRST) 342.50p +1.51%Rightmove (RMV) 2,416.00p +1.26%Menzies(John) (MNZS) 807.00p +1.25%Jardine Lloyd Thompson Group (JLT) 929.00p +1.20%Dairy Crest Group (DCG) 492.80p +1.00%FTSE 250 - FallersEvraz (EVR) 134.10p -4.15%Investec (INVP) 427.90p -3.17%Imagination Technologies Group (IMG) 334.00p -2.91%Vesuvius (VSVS) 472.70p -2.90%Lonmin (LMI) 323.00p -2.51%Alent (ALNT) 375.30p -2.01%Domino Printing Sciences (DNO) 660.00p -2.00%Ferrexpo (FXPO) 182.30p -1.88%Kazakhmys (KAZ) 284.80p -1.79%Polymetal International (POLY) 649.50p -1.52%BC