Further banking falls on FTSE

Further steep falls in the banking sector today led the FTSE 100 Index below the 3,500 barrier to a fresh six-year low.

Lloyds Banking Group plunged as much as 11% at one stage as investors digested details of the latest taxpayer bail-out.

Barclays was another heavy faller amid speculation it is next in line to tap into the UK government’s “toxic” asset insurance scheme, with the wider Footsie plunging 48.5 points to 3482.3 by mid-morning trading.

With as much as 65% of Lloyds now due to be British government-owned, shares in the bank retreated 3.6p to 38.4p.

The pressure on Barclays saw the stock fall 10%, or 6.6p to 58.2p, while HSBC retreated by a further 32.25p to 328.5p as concerns continued over its losses and the £12.5bn (€13.7bn) rights issue unveiled last Monday.

Royal Bank of Scotland also dived into the red, down 1.4p to 18.4p.

Miners were likewise suffering, led by Xstrata, down 13.75p at 310.75p.

Elsewhere, there was a much-needed recovery for insurer Aviva after spectacular losses in the wake of full-year results on Thursday. Shares rose 5.5p to 168.8p, a gain of 3%.

The risers board was topped by Tullow Oil – up 52.5p to 787.5p – after it reported an oil find in Ghana and said it had secured new banking support.

In other corporate news, shares in FTSE 250 housebuilder Bovis Homes rose 20.5p to 398.5p after it delivered full-year results in line with market expectations.

The company reported losses of £78.7m (€86.2m), but said it was hopeful of an upturn in activity.

Elsewhere, sports retailer JJB Sports rose 1.02p to 8.62p – 17% – after it confirmed it had received a number of offers for its health club arm in the second round of the auction process.