The FTSE-100 fell 100 points today after the Bank of England made it clear there would be no interest rate cuts for a while yet.
The Bank's relatively sunny view of the economy and no-change decision on rates drove up the pound to its highest levels against the dollar since March. That had an inverse affect on shares of multinationals earning in foreign currency. Mining stocks took big lumps out of the index, leaving it falling 100 .46 to 6003.02 by midday.
Shares had pushed ahead surprisingly strongly yesterday across Europe and the US despite disappointing data on the US labour market.
However, markets in Asia were lower this morning amid concerns about US-China trade relations, setting the tone.
After a rise in the oil and metals prices yesterday sent miners and oilers up, today came the hangover, with big falls from Rio Tinto, down 5%, BP off 4% and Anglo American down 2%.Between them the trio took 21 points off the FTSE.
The Bank of England ditched its controversially optimistic V-shaped recovery forecast for the economy but remained surprisingly upbeat about the near future, suggesting a move to negative interest rates was unlikely.
Bank officials have been rightly concerned about what will happen with jobs once state-sponsored furloughing comes to an end in October. The steady drumbeat of job losses here - WHSmith being the latest to announce - suggests a major wave of layoffs is underway.
Traders woke to grim news on the labour market with the KPMG/REC survey on jobs finding recruiters reported the steepest rise in the number of people seeking work since the financial crisis. Companies have been laying off staff who had been previously furloughed at a rapid rate, resulting in more than four-fifths of recruitment consultants seeing more jobseekers coming onto their books. The Recruitment & Employment Confederation said the increase in numbers of temps available was the biggest in 23 years of the survey running. Even Arsenal is cutting 55 backroom staff despite securing a place in Europe next season.
However, other survey data on corporate activity suggests there are signs of a recovery across the board, albeit from a very low level.
Aviva shares jumped 3% as new chief executive Amanda Blanc said she would still be paying an interim dividend although future divi policy will be "under review". Some shareholders had been calling for a breakup of the life and general insurance businesses but that is not going to happen on her watch. She will instead pursue sales of foreign arms, apart from Canada.
Traders were pondering what was going on at Pearson, currently under fire from activist investors. Volumes of share trading were massive yesterday - nine times its average - and today it was the biggest riser in the FTSE, up 4%.