FTSE 100 slips 1.36% on opening

The FTSE 100 continued to sink in early trading and fell 1.36 per cent to 4,176.72 by 08:30 GMT.

The decline was led by BT Group, down 6.46 per cent by 08:30 GMT, after the telecoms firm reported quarterly profits had fallen by 81 per cent.

Drinks giant Diageo also saw its shares slip, by 5.4 per cent, after cutting profit targets.

Only a handful of stocks remained out of the red, including miner Rio Tinto, which has seen its largest shareholder Chinalco increase its stake to 18 per cent – up from the current level of nine per cent.

British Land Company, the country's biggest office landlord, also saw its shares rise by 5.54 per cent in early trading.

The firm has announced a rights issue to pay down its debt and raise funds to take advantage of falling property prices.

Overnight, the Dow Jones index closed 0.64 per cent higher, as hopes were raised the US Senate was close to agreement on a stimulus deal.

A $789 billion bill of tax cuts and spending programmes could be passed later today.