Footsie loses early gains

The FTSE 100 Index is down 2.7 at 4849 at mid-morning.

A late rally on Wall Street last night helped to boost the index by 31 points in earlier trading.

But traders say that with sentiment so fragile, the market could reach new lows for this year during June.

Banks and financial stocks are under pressure in London trading, with Lloyds TSB down 13p at 677p; HBOS 10p lower at 765p; Abbey National down 21p at 875p; and HSBC off 4½p at 801½p.

Insurer Prudential is down 11p to 576p; CGNU is off 16p at 555p; and financial services firm Old Mutual has slipped 2p at 101p.

But Vodafone is up 1p at 98¼p; mmO2 has gained ½p at 39¼p; and Cable & Wireless is up 2¼p at 192¼p.

ARM Holdings and Logica are also ahead, by 4¼p at 169¾p and 4p at 24¼p respectively, despite being demoted from the FTSE 100 Index in last night's review. They will join the FTSE 250 on June 24.

Sage, which will be the one remaining tech stock in the Footsie's top flight, is up 4¾p at 172¾p.

British Airways is up 3% or 6¾p at 206¼p amid reports it will cut fares on European routes later this month.

Dairy Crest is down 3% or 17p at 529½p despite posting final figures ahead of forecasts and pledging to boost production. Most analysts attribute the fall in its share price to profit-taking.