FTSE in negative territory

The London market was plunged into negative territory by mid-morning today as results from mortgage lender Bradford & Bingley caused misery for financial stocks.

Shares in the FTSE 250 firm slumped nearly 18%, or 41.5p, to 201.75p after the buy-to-let specialist reported higher levels of write-downs and bad debt - as well as profits falling by nearly half.

This impacted on its larger banking rivals, dragging the FTSE 100 Index down 68 points by mid-session to 5842.

Today's gloomy trading also reflected the Bank of England's latest inflation report indicating that interest rate cuts this year will be below market hopes, as well as profit-taking after yesterday's strong end to trading.

The decline for B&B came after it took £142.1m (€191.3m) of write-downs on investments hit by the credit crunch and said bad debt charges on its residential mortgages trebled to £22.5m (€30.3m) last year.

It saw Alliance & Leicester lose more than 6%, or 34p to 567p - making it the Footsie's leading faller - while Halifax Bank of Scotland was off 19p to 654p and HSBC slipped 1p to 744p.

Also among the fallers were housebuilders as the market digested the interest rate outlook from the Bank of England. Taylor Wimpey was off 6.3p to 171.6p, and Charles Church owner Persimmon lost 20.5p to 725p.

Other fallers included high street giant Marks & Spencer, which dipped 9.25p to 410.75p after news of a discount voucher scheme for its staff fuelled fears over current trading.

The fall affected other retailers including B&Q owner Kingfisher, which was off 4.2p at 132.1p, and Argos owner Home Retail Group which was down 7.5p to 265p.

Heavily weighted miners, who were among the big winners during yesterday's 3.5% Footsie surge, also lost ground amid today's sentiment. Vedanta Resources lost 74p to 1948p, and Xstrata was off 100p at 3719p.

The leading Footsie riser was nuclear power group British Energy, which gained 6%, or 30p, to 519p after unveiling a bumper dividend and offering reassurance on progress with repairs at Hartlepool and Heysham.

Consumer products group Reckitt Benckiser also gained 31p to 2686p after strong growth from its recently-acquired Nurofen and Strepsils brands helped it deliver a 15% rise in full-year profits.

In the second tier, embattled Northern Rock fell 7.25p to 97.75p as reports suggested that both rescue deals on the table failed to match up to Government expectations, heightening the prospect of nationalisation.