At 8:30am, the FTSE100 was down 72.94 points at 5,031.56 with the FTSE250 off 105.49 points at 8,812.4 and the FTSE Smallcaps 6.26 points weaker at 2,778.19.

US & ASIA

In the US last night, the Dow added 77 points at 9,789, the Nasdaq Composite gained 4 points at 2,049 and the S&P500 was up 7 points at 1,043.

In Asia today, the Nikkei was closed for a public holiday, while the Hang Seng was recently down 380.13 points at 21,240.06.

LONDON MARKETS

As anticipated, banking shares topped the headlines early on as Lloyds Banking Group and Royal Bank of Scotland revealed their relative approaches to the Government Asset Protection Scheme (GAPS).

On the upside, Lloyds was the only blue chip in positive territory in early deals, up 2.07p at 87.07p, after announcing it will raise £21bn through a £13.5bn rights issue and £7.5bn swap of existing debt for contingent capital. The government will take up its rights, investing £5.7bn net of an underwriting fee to keep its stake in the bank at 43%.

On the reverse side of the coin, RBS sank 1.24p at 37.41p, on revealing it will be insuring a revised £282bn in GAPS as well as receiving a further £25bn injection of capital, taking the taxpayers stake to 84%. RBS will be barred from paying dividends and will comply with G20 and FSA bonus restrictions for a two year period. The banker will also have to shed its insurance arm and other businesses.

Insurers were also under the cosh, with Old Mutual the biggest FTSE100 casualty early on, down 3.9p at 105.6p. Prudential lost 14p at 552.5p and Aviva dipped 8.7p at 380.4p, despite the successful IPO of its Delta Lloyd business.

Legal & General slipped 0.25p at 76.85p after it reported worldwide new business was down in the first nine months of 2009.

Falling metals prices stang the miners, with Fresnillo the worst-hit, down 25p at 743.4p and Xstrata off 25.5p at 896p. BHP Billiton dropped 49.5p at 1,640.5p and Lonmin slumped 36p at 1,499p.

Oil producers suffered with the general market, despite crude remaining above $78 a barrel, with Shell off 5p at 1,765p, BP down 7.9p at 576.8p and BG Group 9.5p lower at 1,065p.

Primark and Silver Spoon sugar owner Associated British Foods, dropped 7p at 826p, despite reporting a 4% rise in full year adjusted pre-tax profit and saying it was confident of future progress.

Homeware retailer Dunelm provided a rare sign of improvment in the retailers, up 5.4p at 331.4p after reporting continued strong sales growth as it benefited from the demise of rivals such as Woolworths.

In economic news, the PMI Construction Survey will be published at 9:30am.

Story provided by Business Financial Newswire