At 8:30am, the FTSE100 was down 34.77 points at 5,166.2 with the FTSE250 off 80.67 points at 9,060.61 and the FTSE Smallcaps 7.06 points lower at 2,859.57.

US & ASIA

In the US last night, the Dow added 14 points at 9,882, while the Nasdaq Composite lost 26 points at 2,116 and the S&P500 slipped 4 points to 1,063.

In Asia today, the Nikkei was down 137.41 points at 10,075.05 and the Hang Seng was recently off 408.01 points at 21,761.58.

LONDON MARKETS

Financial issues were under pressure in early trade, with Lloyds Banking Group and Royal Bank of Scotland facing the possibility of being broken up, if the Government gets the EC go-ahead to split Northern Rock in two.

Lloyds fell 1.07p at 82.77p and Royal Bank of Scotland lost 0.77p at 40.04p. The one bright spot in the sector was HSBC, up 3.5p at 684p.

However, hedge fund manager Man Group was the biggest blue chip casualty early on, down 16.7p at 314.6p.

Amongst the insurers, Prudential slid 4.5p at 606p in reaction to news that Q3 total retail sales were up 10% at £699m, with UK retail sales down 22% at £157m, but up 66% in the US.