Banking stocks back under pressure

Banking stocks were back under pressure today as the London market extended yesterday’s losses.

Banking stocks were back under pressure today as the London market extended yesterday’s losses.

The FTSE 100 Index, which dived 135 points on Thursday, slid by a further 73.5 points at mid-morning to 6512.6 – a drop of more than 1% and mirroring steep overnight declines in America on credit concerns.

The Dow Jones Industrial Average dropped more than 360 points amid fears banking giants are set for more credit crunch pain, adding to US concerns over inflation as the cost of oil continues to soar. The Nikkei also closed 3% lower.

In London, Barclays and NatWest parent Royal Bank of Scotland each suffered, down 6% or 32.5p at 539p and 23.5p at 475.25p respectively.

Mortgage banks were also hit hard, with Alliance & Leicester off 28p to 724p and Halifax Bank of Scotland down 26p to 818p.

Figures from blue chips BSkyB and British Airways failed to soothe investor nerves.

Broadcasting giant Sky delivered a mixed performance, with shares dipping 26.5p to 663.5p as profits came in slightly below expectations, despite a better than forecast lift in net customer additions.

BA shares also fell, off 15p to 415p, as news of a downward revision to revenue growth guidance overshadowed a 26% hike in interim pre-tax profits.

With little else in the way of corporate news, the market is set to pay particular attention to US data due out later on non-farm payrolls, which could lead to a volatile end to the week.

A shortened risers board was led by exploration group Tullow Oil, up 13p at 639p, and followed by consumer products group Unilever. The Anglo-Dutch group continued to rise after revealing yesterday that it had passed on the impact of rising commodity costs. Shares were 25p higher at 1721p, a gain of 1.4%.

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