Fears of more bad news in the banking sector have dominated morning trading in the London market.
In a quiet day for corporate news Bradford & Bingleyshares slid to a new low in early trading on fears that the bank is planning a rights issue to strengthen its balance sheet.
Despite firm denials by the company about the press reports, its shares fell by 7% in early trading this morning as nervous investors feared it would be the latest victim of the financial turmoil.
But the shares have since recovered and are up half a penny at 167.5p.
The speculation surrounding B&B has hit other banks - already realing from the credit crunch and under pressure to pass on lower interest rates to mortgage holders. However, HBOS bucked the trend, up nearly 3% at 521p to lead the FTSE 100 risers.
Sage is the FTSE 100's biggest faller this morning after a brief trading update from the software group underwhelmed investors. Its shares are down about 4 pct at 189.8p.
In a brief statement earlier this morning the Newcastle-based company said it expected its half-year results will be in line with market expectations.
Seymour Pierce's Derek Brown said Sage's management was right to give a cautious trading update, considering the challenge it faces in turning round its under-performing US healthcare business and its exposure to the slowing US economy.
"This leave the UK and Europe as the only potential areas of strength, but investors will be closely monitoring margins in these regions," Brown said. "These are difficult times for Sage: operational and acquisition risk remains at a high level."
The FTSE 100 is down 45 points to 5850.5, its fifth consecutive decline, tracking recent falls in the US and Asian markets.
Markets on both sides of the Atlantic were badly hit on Friday after General Electric - the US industrial conglomerate seen as an economic barometer - reported a surprise fall in first-quarter profit.
Investors are braced for Wall Street to open lower today and attention will focus on US retail sales data for March which will be announced later today. Analysts expect sales to be broadly unchanged from February.
