Miners and banks add to FTSE uncertainty

The FTSE 100 Index was sharply lower today as miners and banks added to general market fears over the impact of the swine flu outbreak.

London’s depressed performance matched the experience in France and Germany as the FTSE reached mid-morning down 87.3 points at 4079.7.

Banks acted as a drag after reports said regulators had told US banks Citigroup and Bank of America they may need to raise more capital. Chancellor Alistair Darling is also expected to announce next month that “too-big-to-fail” UK banks such as HSBC, Lloyds Banking Group, Royal Bank of Scotland and Barclays should hold more capital than others.

The speculation caused Royal Bank of Scotland to fall 0.8p to 33.5p and Barclays to drop 9.5p to 224.75p, while Lloyds Banking Group was off 2p at 98.5p.

In the mining sector, stocks were down by as much as 9% after a fall in metal prices. Xstrata set the pace after a decline of 52.5p to 547.5p.

With the World Health Organisation raising the level of its pandemic alert, investors continued to bail out of travel-based stocks. British Airways fell another 6.4p to 144.8p, while cruise ship firm Carnival was off 108p at 1699p and Thomson owner TUI Travel dropped 15p to 247.75p.

In a busy session for corporate updates, BP shares up 3.5p at 486.75p after it reported better-than-expected first quarter profits of $2.39bn (€1.84bn), down 62% on a year ago.

BP was one of only three stocks in positive territory – the others being GlaxoSmithKline, up 19p at 1082p, and Cobham, which rose 0.2p to 179.7p.

Friends Provident shares were under pressure, down 6% or 3.8p to 58.5p, after it detailed a worse-than-expected 40% dip in quarterly sales and said it was braced for a difficult year.