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.

Commodity issues were also out of favour as metals prices eased and crude drifted away from the $80 a barrel mark.

Xstrata was the worst of the miners, off 27p at 946.5p, while Rio Tinto lost 58.5p at 2,812p, Vedanta dropped 59p at 2,156p and Anglo American fell 41p at 2,227p.

Randgold Resources bucked the trend, adding 4p at 4,288p as gold remained over $1,038 an ounce.

Oil majors suffered in tandem with the miners, as the euphoria of BP's better-than-expected numbers yesterday wore off.

BG Group today reported operating profit of £856m in the third quarter down 38% on the prior year period, sending its shares 22.5p lower at 1,110p. BP fell 6.6p at 587.8p and Shell dropped 14p at 1,876.5p, in sympathy.

Tobacco giant BAT slumped 26p at 1,964.5p after reporting a slowing in volume growth across the world as the recession progressed. Peer Imperial Tobacco was 21p lower at 1,806p on the read across.

Among the few gainers early on, GlaxoSmithKline added 7.5p at 1,264p ahead of its interim numbers due later today, with Shire also ahead, up 7p at 1,047p and Smith & Nephew up a penny at 546.5p.

BT Group and Vodafone gained 0.8p at 134.3p and 0.15p at 137.95p, respectively, as Barclays initiated coverage on the telecoms sector with Vodafone started with an equal-weight rating and BT Group initiated with an overweight rating.

Also notable amongst the early winners were distribution specialist Bunzl, up 1.5p at 663p and confectioner Cadbury, ahead 2p at 777p, shrugging off a downgrade to hold from buy at Investec, with the target cut to 840p from 875p.

Story provided by Business Financial Newswire