Bank shares have fallen back after the Bank of England cut interest rates by 25 basis points, and gave a gloomy prognosis of the credit markets and the economic outlook.
Royal Bank of Scotland is down 16.25p at 353p, Barclays has fallen 19.75p to 450.75p and Alliance & Leicester slipped 19.5p to 506.5p.
The FTSE 100 index, however, is little changed from where it was before the rate decision was announced, and is down 49.8 points at 5934.1.
Martin Slaney at GFT said: "The Bank's decision has been somewhat overshadowed by rumours of more writedowns to come from Merrill, talk of big index futures stop loss levels being hit, Lehman resorting to liquidating funds and higher oil prices. The bigger picture remains one of caution and uncertainty."
British Energy - still 5.5% higher - is not the only major company in the bid spotlight.
Pubs group Mitchells & Butlers is 3.75p better at 322.25p on talk that private equity firms CVC and Blackstone want to buy up to 29.9% of the business.
Evolution said: "This [report] follows similar offers from Permira and Bain. One way to do this would be to buy the 23% stake (around £300m) from Tchenguiz; for the company to issue 5% of new stock via a placing (around £65m) and to buy the balance in the market. We think the Blackstone combination is the front runner because of its size, its experience in the leisure segment and because it could consolidate Tragus's 155 units into M&B. Tragus is exactly in the right spot with its portfolio of casual dining brands, including Cafe Rouge, Bella Italia, Strada, Ortega and Oriel."
Oil exploration group Soco, hit yesterday by rumours of problems in Vietnam, edged down another 47p to £16.87. It decided to give an update on the well, and ABN said: "The press release is essentially a holding statement, and on the basis of the information included, yesterday's share price move looks like a bear raid.
"However, in our view, it does highlight that the market is growing increasingly edgy about the impending results of "E" [Vietnam prospect], particularly given the length of time taken to drill the well."
