The FTSE 100 Index edged lower today as banking stocks bore the brunt of a cautious note on the sector from analysts at Credit Suisse.
Lloyds Banking Group was the leading casualty with a decline of more than 10%, as the gloom over banks offset better news from the likes of Holiday Inn group InterContinental Hotels.
The wider Footsie also struggled to make headway, down 10 points at 4425.5 at the close after a subdued start on Wall Street.
UK unemployment figures released a day early after an accidental leak also did little for sentiment after showing a rise in the jobless total to 2,215,000 - the worst figure since 1996.
Meanwhile, confidence in the banking sector was shaken by the downbeat Credit Suisse note, which saw downgrades for Lloyds, Barclays and RBS.
The broker argued that banking margins will come under more pressure than is currently expected.
Lloyds fell 10% or 10.2p to 89.1p - the top-flight's leading faller - while Barclays dropped 18.5p to 268.5p and Royal Bank of Scotland eased 2.6p to 43.5p, almost 6%.
Meanwhile, encouraging comments from InterContinental Hotels helped the firm's shares lift by almost 3%, or 16.5p to 656.5p. It revealed a stabilisation in occupancy rates and said average revenues per available room - the key industry measure - were above the industry norm.
A number of retail stocks were higher after the British Retail Consortium reported the sector's best performance in three years last month. Morrisons rallied 9.75p to 245.75p, while Next cheered 43p to 1550p.
Vodafone was another strong riser, up 3.85p to 123.5p 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 65p at 1567p amid market concerns about dividend prospects.
Outside the top flight, shares in Enterprise Inns were down 13p to 160p 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.
Shares in Stobart Group surged 10%, or 9.75p to 107p, after it reported a sharp rise in full-year profits and said it had not been as badly affected by the economic downturn as some of its rivals. It has reported a shift to cheaper, own-label brands, but this has not affected volumes.
The biggest Footsie risers were Fresnillo up 28p at 609p, International Power up 11.5p to 276p, Amlin up 14.75p at 370.5p and Morrisons up 9.75p to 245.75p.
The biggest Footsie fallers were Lloyds down 10.2p at 89.1p, Lonmin down 125p at 1335p, Rio Tinto off 209p at 2801p and Barclays down 18.5p at 268.5p.