Afternoon markets: Dow plunges after China raises rates

US shares fell in early trading on the back of interest rate concerns following the Chinese Central Bank’s decision to increase its inter-bank rate for the first time in four months.

As at 15.00 GMT, the index was down 0.51%, or 53.81 points, to 10519.

The downward plunge came despite a better-than-expected weekly unemployment report showing jobless claims rose by 1,000 to 434,000 last week.

The biggest losses came from Alcoa down 3.65% while technology firm 3M fell 1.43% and Microsoft 1.14%.

Bank of America is bucking the morning trend, up 1.16%, with Boeing (up 1.37%) and Travelers (up 0.58%) also amongst the morning's winners.

Meanwhile, the FTSE remains in negative territory after briefly climbing into the red after the Monetary Policy Committee (MPC) decided to keep interest rates at their historic low level of 0.5% and maintain quantitative easing. As at 15.00 GMT, London's blue chip index was down 0.28%, or 15.49 points, to 5514.

London's leading index made small, but wavering gains after the MPC's announcements - despite the fact the move was widely anticipated. Part-nationalised Lloyd's Banking Group (up 3.87%) and Barclays (up 2.79%) were among the afternoon's high flyers, with Wolseley - shining after being upgraded by UBS to buy from neutral - and Associated British Foods also performing strongly.

Insurers Prudential (down 2.25%) and Standard Life (down 2.08) fared less well, with Vodafone and National Grid also having a tough afternoon session. Miners - which earlier weighed down the index - recovered to show gains, with Kazakhmys and Fresnillo leading the charge.

Sainsbury's is having a strong showing after revealing bumper Christmas sales, with fellow retailer Morrison's also going well.