FTSE down 0.5 percent as banks head south
The benchmark index fell 0.5 percent on Wednesday, weighed down by banking stocks that fell on fears over writedowns, while miners lent some support by tracking metal prices higher.
FTSE gains as metals spur minersAt 8:30 a.m., the FTSE 100 was down 25.8 points at 5,508.7 and is now over 14 percent lower for the year to date.
Overnight, U.S. stocks slipped as banking shares tumbled on worries about credit losses. Japan's Nikkei was over 2 percent down on global economic concerns.
The negative sentiment helped ease UK banks lower, with Barclays, Lloyds TSB and HBOS all trading lower.
Royal Bank of Scotland shed 4 percent after Commonwealth Bank of Australia Ltd said it was pulling out of talks with the bank to buy ABN AMRO Australia.
But a consortium led by Goldman Sachs Group has agreed to pay about $1.5 billion (750 million pounds) for a number of ABN AMRO's private equity assets, the Wall Street Journal said.
"We are just getting slight negative activity," said David Buik at BGC Partners. "The slew of financial data yesterday turned the banks poor...all in all the market didn't like it."
"We are just stepping back from the breach. The mood of the market overall is still ok. We have found the bottom but we are testing one or two sectors which are vulnerable."
Commodities headed north after recent weakness, as metal prices climbed to pull the mining sector up. Xstrata, Kazakhmys, BHP Billiton rose 1.6-2.3 percent.
Rio Tinto gained 2.1 percent after it was set to sign an agreement with India's NMDC to prospect for iron ore, the chairman of the state-run Indian company said.
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