Barclays led a downturn for the London market today after fears grew about the banking group’s exposure to the US sub-prime mortgage market.
The stock fell 3%, or 16.5p to 591.5p, as uncertainties regarding its takeover bid for Dutch bank ABN Amro also saw investors turn their backs on the shares.
The FTSE 100 Index lost hold of early gains to stand 6.9 points lower at 6306.4 by mid-morning, with financial stocks dragging on the blue chip index.
Royal Bank of Scotland, also embroiled in the ABN saga, was down 10.5p at 547.5p, while Alliance & Leicester slid 16.5p to 980p.
Defence giant BAE Systems was on the front foot as reports suggested the group is set to clinch a £20bn (€29bn) deal to supply jets to Saudi Arabia.
The group’s shares soared more than 2%, or 11p to 459p, as The Times reported that the Kingdom was set to sign a Government contract next week for 72 Eurofighter Typhoon jets from BAE.
Miners were also performing well, as gold prices continue to rise.
Lonmin advanced 67p to 3446p, a rise of 2%, followed in the sector by BHP Billiton, ahead 23p at 1496p and Vedanta Resources up 18p at 1928p.
Supermarket Sainsbury’s was back on the front foot after share troubles seen earlier in the week on poor consumer confidence data.
An upgrade from Societe Generale, citing a 90% chance of a successful bid from Qatari-backed Delta Two, saw the stock gain 6p to 548p.
Elsewhere, FTSE 250 firm Domestic & General, the warranties specialist, saw shares leap 10%, or 128p, to 1392p after agreeing to a £523.9m (€774m) takeover by private equity firm Advent International.
But pubs group Wetherspoon saw shares slide 5%, or 32p, to 566p after cautioning over the effects of the UK smoking ban on profits.