Financials have reasserted their dominance again, with warnings from Citigroup across the Atlantic and HBOS in the UK both helping to drag markets lower.
Citi chief financial officer Gary Crittenden reportedly told an investor conference this afternoon that the bank could face more sub-prime mortgage write-offs in the second quarter. The bank's shares have fallen around 4% after the comments.
Meanwhile HBOS said it would write off £1bn in the first half, due to the credit crunch, and predicted a 9% fall in house prices. HBOS dropped 22p to 296.75p - compared to its 275p rights issue price. Fellow mortgage bank Alliance & Leicester lost 18.5p to 304.25p.
So with Wall Street down around 22 points by the time London closed, the FTSE 100 fell 48.5 points to 5708.4. A weaker than expected US economic survey did not help matters.
On the rise was mining group Anglo American, up 119p to £35.18, on hopes of a bid from Brazil's Vale. Energy companies benefited from an upbeat note from Goldman Sachs, while BG was additionally helped by an upgrade from Bernstein Research. Its shares closed 9p higher at £12.43, with traders also reporting renewed - and rather vague - rumours of a possible takeover by Royal Dutch Shell.
Finally, on another fairly volatile day, a valid point about how markets can talk themselves into trouble, courtesy the Cash and Burn blog.
