Market Report: Once predicable, RSA is in disarray since the departure of its boss

It's been a torrid few months for RSA Insurance, a company that was once as predictable as a Swiss clock but is now in disarray after the departure of its beleaguered boss, Simon Lee, last week.

Following downgrades by Deutsche Bank and the ratings agency Fitch, Standard & Poor's was the latest to raise doubts about RSA's capital position since the discovery of a black hole in its Irish business last month. The insurer's shares rose 2.55 per cent to 92.4p yesterday but remained under pressure as analysts warned investors to expect more bad news.

"We remain cautious on RSA shares given near-term uncertainties, namely credit rating action, the outcome of the PwC review [expected in January], details of the capital plan [expected before the final results in February] and potential for new weather losses to put further pressure on the capital position," said scribblers at Numis, who downgraded its target price by 15p to 85p.

Overall, it was a nervy session across the London Stock Exchange ahead of a key monetary policy announcement by the US Federal Reserve today. The FTSE 100 fell 36.01 to 6,486.19, while the wider FTSE 250 dipped 36.02 to 15,348.56.

Alastair McCaig, market analyst at IG, said: "In the run-up, 34 per cent of institutional analysts are predicting a cut [to quantitative easing in the US], though this of course still means that 66 per cent think there will be none. Clearly the majority held sway on Monday as markets rallied, but, 24 hours before the meeting itself, nerves crept back in as equity indices have fallen."

Elsewhere, shares in the advertising giant WPP fell 13.58p to 1,305.42 despite the company buying a 30 per cent stake in Richard Attias & Associates.

Airlines were flying in different directions after the interim findings of the Davies commission on airport expansion were best summarised as "nothing happening anywhere, any time soon".

IAG, the owner of British Airways, fell 4p to 378p and budget rival easyJet dipped 7p to 1,499p, although struggling regional carrier Flybe made gains before closing flat at 97.1p.