FTSE down as blue chips stumble

London's blue chip stocks were in negative territory today, giving back some of the gains seen in last week's rally.

The FTSE 100 Index slipped 33.1 points to 6187 by mid-morning after a weak close on Wall Street dampened sentiment in the UK as investors returned from the long Bank Holiday weekend.

In the US, stocks declined after new data showed a fall in monthly sales of existing homes, adding to concerns about the state of the country's economy.

Mining group Lonmin - down 86p at 3086p - led the fallers board after the stock's strong recovery last week tailed off.

Financial stocks were also suffering, with Barclays leading the pack after reports suggested that the high street bank has been left with significant exposure to securities backed by the US sub-prime mortgage sector. The group, which has denied the reports, saw its shares down 15p at 596p.

Others on the back foot included Alliance & Leicester, which dipped 21p to 1028p, and Royal Bank of Scotland off 9.5p at 571.5p.

In a subdued session for corporate news, Sainsbury's dipped 1% amid further signs that takeover talks involving its board and Qatari-fund Delta Two were struggling to make headway. The stock fell 6.5p to 538p.

Airline British Airways was one of the strongest risers, up more than 1%, or 6p to 415.25p, while power station business Drax topped the risers' board, climbing 9.5p to 644p.

Outside the top flight, London Stock Exchange shares were being closely watched after reports at the weekend said Singapore's Temasek had expressed interest in buying Nasdaq's 31% stake. That fuelled speculation of a full takeover bid, causing shares to rise by 28p to 1341p.

Oil and gas services group John Wood jumped almost 8%, or 25.5p, to 362.25p on the back of a strong set of interim results. The company said it now expects to beat full-year profits forecasts.