Market Update

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By 10.15am (London time), the FTSE 100 had lost six points to 5777, while the FTSE 250 was practically unchanged at 11,805.

In Europe, markets were somewhat lower, but the general feeling is that investors are opting to sit tight in advance of the Fed this afternoon.

Merger activity is livening up the day, as BAE and EADS look to create a joint company (which some wags have dubbed BEADS) that can rival the US giants of Lockheed and Boeing. The complex nature of defence firms, with their government shares and their top-secret technology, means that progress could be tortuous, especially if the Americans decide that they need to have a say in the matter. Yesterday BAE shares surged 10% after a Bloomberg news report on the deal, but both firms are down around 6% as investors weigh up the various hurdles that need to be overcome.

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