Financials keep Footsie down

Financial stocks dragged the top flight down today as uncertainty continued to dog the market after the latest terror attacks.

All the major banks and insurers were in the red by mid-morning, leaving the FTSE 100 Index 8.2 points off at 5213.4.

The market had opened higher on the back of takeover talk surrounding catering group Compass, road haulier Exel and BPB, which yesterday emerged as a potential target for French glass maker Saint-Gobain.

However, the optimism dissipated as news of a shooting of a suspected suicide bomber in London fuelled the ongoing concern about the security situation in the capital.

New York failed to offer support, with the Dow Jones Industrial Average sliding 61 points last night.

Scrutiny of the potential effect on the US economy of the revaluation of China’s currency, rising oil prices and mixed corporate results all took their toll.

Back in London, the main loser among the banks was Barclays, shedding nearly 1% or 4.5p to 561p, while Norwich Union owner Aviva took the biggest hit in the insurance sector, declining 10p to 629p.

Catering group Compass was leading the top flight higher amid further speculation a bid could be on the cards. Shares lifted nearly 5% or 11.5p to 252.5p.

Plasterboard manufacturer BPB was hard on its heels after yesterday’s news that Saint-Gobain was mulling a takeover offer. BPB cheered more than 3%, up 23p to 671.5p, after adding nearly 27% yesterday.

And supermarket chain Morrisons was also in the black, up 2.75p to 186p as it broke free of the regulatory constraints on its £3 billion takeover of Safeway by announcing the sale of a final batch of stores.

Miners were continuing to take advantage of continuing upbeat sentiment, with Xstrata adding 14p to 1176p and Antofagasta putting on 19p to 1312p.