FTSE dips in morning trading

London’s blue-chip share index failed to make headway today despite a recovery from bank stocks as fears over capital raisings eased.

Falls among insurance and commodity stocks dragged the FTSE 100 Index lower for the second straight session, down 19.4 points to 5708.9.

Investors were also waiting on the sidelines ahead of a speech by US Federal Reserve chairman Ben Bernanke, with a heavy schedule for economic data in America also weighing on sentiment.

Mr Bernanke’s comments will be watched for further confirmation on any more efforts to boost the money supply.

Expectations for further quantitative easing in the US kept the dollar under pressure against most major currencies. The pound rose to more than 1.60 US dollars on the greenback weakness.

Bank stocks dominated the risers board on the Footsie as the sector clawed back ground lost after Standard Chartered’s decision to raise additional capital in a rights issue, which sparked concerns of a slew of similar moves.

Barclays has been lower following Standard’s move but today recovered 2%, or 4.6p to 284.6p, while part-nationalised Royal Bank of Scotland lifted 0.6p to 45.9p and Lloyds Banking Group added 0.8p to 71.3p.

HSBC lost earlier gains to stand 0.2p lower at 662.1p after it confirmed talks had ended unsuccessfully over its plan to buy a 70% stake in South Africa’s Nedbank.

It pulled out of the proposed deal – worth a reported £5bn (€5.6bn) – after a two-month period of exclusive talks, which were due to expire this weekend. Shares in Nedbank’s majority owner Old Mutual fell 8.9p to 136.3p, or 6%.

Insurers followed the group on the fallers’ board after a downbeat note on the life assurance sector by broker Citigroup.

Standard Life dropped 6.8p to 227.8p and RSA Insurance lost 3.9p to 132.3p.

Outside the top flight, shares in broadcaster ITV were 3% higher after Morgan Stanley upgraded the stock and said the firm and the industry as a whole should benefit from continued strength in advertising spending. Shares rose 1.9p to 64.9p.

Belgium-based gearbox designer Hansen Transmissions was the top riser in the FTSE 250 Index – up 10% or 4.6p to 50.4p – after it said it had received an offer for its industrial gearbox division from Japan’s Sumitomo Heavy Industries.

But telecoms group TalkTalk suffered after a broker downgrade, shedding 5.4p to 134.4p in the second tier.