View the article online at http://citywire.co.uk/money/article/a327759
Midday Market: FTSE falls further as gloomy mood intensifies
US seen opening lower, while UK shares extend losses as banks turn negative.
UK shares continued to decline just after midday as banks racked up losses alongside weaker miners, taking the index down near 2%.
By 12:11pm, the FTSE 100 had shed 1.9% or 79.33 points, to 4,215.87, while the FTSE 250 was off 2.6% or 163.92 points, at 6,259.84, with financial shares hit by profit taking after recent gains as investors wait on details of the government's plan to buy up toxic assets.
Pressure from the US also contributed as investors prepared for a weaker opening on Wall Street following yesterday's gains. Futures indicated falls on both the Dow Jones Industrial Average and the S&P 500.
With an announcement on the asset purchasing facility expected this week, and following a brief recovery in share prices, banks were hit as investors cashed in on recent gains.
The biggest loser was private equity company 3i Group - down 14.7% on fears it may have to carry out a rights issue.
Miners also stayed weaker, although off lows, on concerns of what impact the downturn was having on their balance sheets and prospects. Xstrata, which earlier said it was undertaking a rights issue, gave up 8.2%, while Rio Tinto and Vedanta Resources were both 5.1% lower.
Balfour Beatty was the top riser, up 2.5%.
On the second line engineering company Cookson Group remained the top faller, down 13.5% after its update which revealed it was axing jobs and carrying out a deeply discounted rights issue.
In currency markets sterling rebounded from lows to stand up against the dollar, climbing from $1.4225 to $1.4321. Versus the euro it was also ahead, from €1.0815 to €1.0895.
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by David Kempton on May 24, 2016 at 17:15