FTSE under pressure

The London market was under pressure again today as the break-up of the Dunfermline Building Society sent tremors through the bank sector.

The FTSE 100 Index shed 2.5% or 101.2 points to 3798.7 with all the major banks in the benchmark index shipping losses in a difficult start to the trading week.

Dunfermline was saved from collapse in a deal with larger mutual Nationwide Building Society, while the rescue of another small savings bank by the Bank of Spain also added to the nerves.

Among the Footsie’s listed banks, Lloyds Banking Group was the chief faller, down 6.4p at 69.7p – or 8%. It was closely followed by Barclays, which slid 14.2p to 159.6p as its recent revival was also halted by a downgrade from Societe Generale.

Elsewhere in the sector Royal Bank of Scotland was off 2.1p at 24.5p, while HSBC fell 34p to 369.5p.

Insurers were meanwhile enduring a miserable session with Aviva the leading faller – down more than 9% or 22p to 215p. It was closely followed by Old Mutual, off 4.4p at 47p.

Among the other fallers, Carphone Warehouse fell 5% following reports that its TalkTalk arm could make a last-ditch offer for Tiscali’s UK broadband business. Shares were down 7p at 118.75p.

But on a shortened risers board, telecoms firms were making all the running. Cable & Wireless gained 3.3p to 138.3p despite JP Morgan cutting its price target on the firm.

Meanwhile mobile phone giant Vodafone was 4.75p to 312.75p after an upgrade from brokers at Royal Bank of Scotland.

Elsewhere, online gaming firm 888 fell more than 5% after it reported pre-tax profits of $48.6m (€36.8m) but suffered a “disappointing” fourth quarter for poker. Shares slid 5.88p to 106.75p.