FTSE hit by banking stocks and weak US opening

The FTSE 100 has closed down 62.1 at 5074.2

The FTSE 100 has closed down 62.1 at 5074.2

Banking stocks and a weak opening on Wall Street pulled the London market lower.

Barclays was off 4%, or 27p at 593p, after warning of higher costs and bad debt provisions in a statement ahead of its interim results in August.

Confidence was further hurt by the Dow Jones Industrial's latest fall below the 10,000 barrier as mixed economic data in the US failed to provide much evidence that investors should return to the market.

London's move south followed a 32 point gain early in trading as the City welcomed Vodafone's annual figures despite huge bottom-line losses after the group incurred massive charges.

Investors focused on the underlying performance which showed strong profits growth before the one-off costs.

However despite an early 7% rise which pulled the Footsie ahead, Vodafone followed the rest of the market lower to lose all its session's gains to stand 2¼p lower at 102¼p.

One analyst said that while there was no negative news, there had been some concern about Vodafone's growth prospects.

MmO2, which had also surged during early trading, fell back to close the session down ¼p at 48¼p. Cable & Wireless was 2p lower at 207p.

Among the banks suffering in Barclays wake, Royal Bank of Scotland dropped 28p to £19.75, Lloyds TSB fell 10p to 740p, HBOS was down 20p at 812p, Standard Chartered eased 15p to 803p, and HSBC was off 13½p at 830p.

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