FTSE relinquishes yesterday's gains

Banking and mining stocks remained volatile today as London’s FTSE 100 Index gave up all of yesterday’s surprise end-of-session rally.

There had been hopes in the City for a positive start to business following Wall Street’s near-2% gain last night.

But this failed to materialise as the Footsie stood 63.3 points lower at 4145.3, a decline matched in European markets.

Barclays was among stocks under pressure after attempts to smooth the passage for its Middle Eastern bail-out plan failed to appease shareholder lobby groups. Shares were down 8.3p at 141.2p during another unpredictable session for the sector.

HSBC fell 35.25p to 670.75p but HBOS jumped 7.4p to 70.4p on the day Lloyds TSB shareholders are expected to back the takeover of the ailing bank. Lloyds rose 0.7p to 131.9p.

Elsewhere, Marks & Spencer shares fell 4% after it emerged the retailer planned to hold a one-day 20% off sale tomorrow. Further pressure on the stock, which fell 8p to 203.25p, came after Seymour Pierce cut its full-year profits forecast on M&S.

Citigroup was another City firm to express concern over M&S’s prospects, as it did with a number of retail stocks. Currys owner DSG International was the biggest casualty from Citi’s price downgrades as shares slid another 16% or 2.5p to 13.5p.

Other fallers in the retail sector included Mothercare, which dropped 25.25p to 264.75p ahead of interim results tomorrow.

Aside from HBOS, the biggest top flight gain of the session came from credit checking firm Experian – up 11% or 33p to 339.5p – after it posted first half results slightly ahead of market expectations.

Elsewhere, insulation firm SIG dropped 13% after it warned profits were likely to be towards the bottom end of expectations. SIG, which also said it planned to cut 900 jobs, was down 23p at 158p.