Banking stocks suffered losses of more than 2% today as analysts downgraded price targets in the wake of full-year results earlier in the week.
With another high for oil prices putting pressure on the wider market, the FTSE 100 Index reached mid-morning 60.2 points lower at 5905.5.
The drop followed a 2% fall for the blue-chip index yesterday as investors on Wall Street reacted badly to more cautionary comments about the US economy from Federal Reserve chairman Ben Bernanke.
Banks were high up the Footsie faller’s board, with Halifax Bank of Scotland down 19.5p to 615.5p as investors continued to desert the stock after disappointing annual results earlier this week.
Barclays lost 15p to 485.5p, and Royal Bank of Scotland, which unveiled £2.5 billion losses from the credit crunch yesterday, also eased 11p to 391.25p. Sentiment towards RBS was affected by Credit Suisse’s decision to cut its price target on the stock.
Elsewhere in the financial sector, insurer Admiral Group dipped 40p to 1005p and Royal & Sun Alliance fell 3.2p to 132.8p.
Oil prices of more than 103 US dollars a barrel meant British Airways slipped 7.5p to 258p, while transport giant FirstGroup was off 18.5p at 587p.
US-facing building supplies firm Wolseley lost ground amid the jittery mood across the Atlantic. Its shares were 14p off at 631.5p.
Among the Footsie’s leading gainers was pest control-to-hygiene firm Rentokil Initial. The company slumped nearly 25% yesterday after warning of significantly lower profits this year, but clawed back 2p to 82.5p today.
Next also rose 2p to 1307p after Credit Suisse said the fashion chain could attract a bid of up to £20 a share.
In the second tier, Mecca Bingo owner Rank rose 0.25p to 91.25p despite signs of improvement at its bingo clubs. The company has also struck a deal to offload its pension liabilities.