FTSE lower as banking rally ends
The FTSE 100 has sunk two per cent lower in morning trading after a banking rally last night ran out of steam.
FTSE lower as banking rally ends" class="imageframe alignright" height="200" src="http://pictures.directnews.co.uk/liveimages/London+Stock+Exchange_1455_18997752_0_0_7019977_300.jpg" width="200"/>The FTSE 100 has sunk two per cent lower in morning trading after a banking rally last night ran out of steam.
The index fell to 4,208.30 by 09:45 GMT with only a handful of stocks staying out of the red.
Lloyds Banking Group and Barclays both slipped back under a £1, with Lloyds' shares falling 10.7 per cent and Barclays declining 9.25 per cent.
The mining sector continued its slide, as gloomy economic news from Davos stoked fears of a prolonged and deep recession.
Shares in Xstrata fell 10.7 per cent to £5.60p, while Rio Tinto fell 7.49 per cent and Vedanta Resources dropped by 6.3 per cent.
Pharmaceutical and utilities were the winners this morning, with Smith & Nephew up 2.4 per cent, AstraZeneca up 1.82 per cent, and United Utilities rising 1.15 per cent.
Overnight, the US Dow Jones index soared on hopes the Obama administration is making progress on the banking rescue plan, rising 2.46 per cent.
In Asia, the Nikkei 225 rose 1.79 per cent on the news from the US, while in Hong Kong the Hang Seng jumped 4.58 per cent.