FTSE sees second day of banking falls

A second day of bank share falls held back progress on the London market today and offset trading cheer from Holiday Inn group InterContinental Hotels.

A second day of bank share falls held back progress on the London market today and offset trading cheer from Holiday Inn group InterContinental Hotels.

Banking stocks continued to see a reversal in their recent bull run, with Lloyds Banking Group hit the hardest, down 6%, or 5.9p to 93.4p.

The wider FTSE 100 Index also struggled to make headway, up 16.8 points at 4452.3 in mid-morning trading.

Other recent strong risers such as Barclays and Royal Bank of Scotland joined Lloyds in giving back gains, down 11p at 276p and 1.2p at 44.9p respectively.

Investors have been looking to lock in profits secured amid the bounce back in recent sessions.

And sentiment in the sector was not helped by a downbeat Credit Suisse note, which saw downgrades for Lloyds, Barclays and RBS.

But encouraging trading figures from InterContinental Hotels helped power the firm ahead by 4%.

Shares in the company were up 26.5p to 685p after it revealed a stabilisation in occupancy rates and said average revenues per available room – the key industry measure – were above the industry norm.

Vodafone was another strong riser, up 3.05p to 122.7p after announcing an initiative allowing content partners and developers to create a range of mobile internet services that can be rolled out to all Vodafone customers.

Imperial Tobacco suffered a poor session, even though it reported a 49% rise in underlying profits for the half year. Shares were down 71p at 1561p amid market concerns about dividend prospects.

Outside the top flight, shares in Enterprise Inns were down 7.25p to 165.75p after the pubs group scrapped its half-year dividend and said it remained cautious about trading prospects, despite improved trading in April.

Hovis-to-Oxo firm Premier Foods also saw shares fall in the FTSE 250 after a trading update.

It hailed a “solid” start to 2009, but a 3% rise in sales were slightly below market expectations and shares fell 2p to 36.5p.

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