Yesterday's rally in the market proved only to be a temporary reprieve. As expected from the downbeat start to this morning's trading, the FTSE 100 continued to sink lower, spurred by bad news from the US housing market later in the afternoon.
Banks kept the index of leading shares in the red and it closed 87 points lower or 1.5% at 5766.4. The FTSE 100 has lost more than 11% this year on credit crunch fears.
Other losers included British Airways, which shed over 7.5% after warning of a troubled year ahead for airlines due to global economic weakness and higher fuel costs on the back of record oil prices.
Drugmakers also struggled today as Britain began investigations into strengthening the law on disclosing drug trial results.
The sentiment over today's trading was best summed up by David Buik at Cantor Index who said: "The banking sector seems to be well and truly under the cosh. It was an inauspicious session."
