FTSE tumbles below 5,000 midday

At high noon, the FTSE100 was down 112.67 points at 4,991.83 with the FTSE250 off 191.85 points at 8,726.04 and the FTSE Smallcaps 33.96 points weaker at 2,750.49.

NEW YORK

US stock futures suggest a negative session start today, taking a lead from falls in European markets.

Dow Jones Industrial Average futures were down 83 points to 9,652, S&P500 futures dipped 9 points to 1,029.1 and Nasdaq 100 futures were down 13 points to 1,655.

LONDON MARKETS

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

Lloyds weakened following a positive start, down 1.09p at 83.91p, 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%.

Meanwhile, RBS sank to the bottom of the blue chip league, 2.72p lower at 35.93p, 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 Aviva taking the biggest hit, down 18.5p at 370.6p, despite the successful IPO of its Delta Lloyd business which raised ?1.12bn. Prudential lost 24p at 542.5p and Old Mutual slumped 5.2p at 104.3p.