Bank earnings fears drag UK stocks down

Britain's FTSE 100 slipped 1

Britain's FTSE 100 slipped 1.3 per cent today as banks and insurance stocks were hit after bad news from Dutch giant ING highlighted the market's jittery mood.

Telecoms equipment maker Marconi and microchip developer ARM Holdings climbed after both released reassuring results.

But more typical of the market's mood was a 5 per cent drop by engine company Rolls-Royce - hit by talk of more job cuts due to slow demand.

By 12.42 p.m., the FTSE 100 was down 69.8 points to 5,075.7, extending slim losses on Friday when weak US retail sales data revived global recession fears.

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Banks knocked 19 points off the FTSE 100's value, led lower by HBOS and Lloyds TSB, and the heavyweight oil and pharmaceuticals sectors each accounted for about 13 points of the FTSE 100's decline.

Market volume was a moderate 690 million shares, with losers outnumbering gainers by three to one.