FTSE settled by Asian markets

The FTSE 100 Index drifted lower today as fresh belligerence from North Korea unsettled investors.

Markets in South Korea, Hong Kong and Japan lost ground as the country followed up its nuclear test with two further missile launches.

Traders were also in caution mood ahead of key economic reports in the United States, leaving the top-flight index 35.6 points lower at 4329.7 by mid-morning.

Investors had little to get their teeth into in a quiet beginning to the week following the bank holiday weekend, but Lloyds Banking Group was a leading casualty after reports said it was looking to sell stakes in up to 60 companies acquired when it bought Halifax Bank of Scotland.

Shares fell 3.4p to 65.2p, a drop of 5%. Among the other banks, RBS fell 1.7p to 39.2p and Barclays drifted 7p to 279.75p.

Thomas Cook and Thomson owner TUI Travel were also lower in the top flight, down 3.5p at 231.25p and 4.75p to 253p respectively. Credit Suisse cut its target price on Thomas Cook due to concerns over later bookings and rising debt levels.

The weaker sentiment over the economic climate also fuelled demand for more defensive sectors.

British American Tobacco was the leading FTSE gainer, up 27p to 1688p, while Benson & Hedges firm Imperial Tobacco added 18p to 1626p.