The market mood is very fragile out there. The FTSE 100 is currently 81 points lower at 5585.1, a 1.2% decline, having fallen as low as 5583.3.
Banks are weaker after yesterday's decision by the Federal Reserve to keep US interest rates unchanged, amid concerns about inflationary pressures in the economy. On top of that came news that Dutch-Belgian group Fortis would raise €8bn to shore up its balance sheet.
Goldman Sachs added to the gloom by adding Citigroup to its sell list and warning the bank faced writedowns of $8.9bn in the second quarter. Talk of more credit crunch losses was not what investors hoping for a line to be drawn under the problem wanted to hear.
So Lloyds TSB, rumoured to be planning a bid for Deutsche Postbank, lost 18p to 310.5p, Standard Chartered has fallen 92p to £14.77 and Barclays is down 13.35p at 309p. Traders pointed out that part of the Barclays' fall was due to the shares going ex-entitlement for the open offer announced earlier this week.
