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.

Legal & General slipped 1.15p at 75.95p after it reported worldwide new business was down in the first nine months of 2009.

Falling metals prices stang the miners, with ENRC the worst-hit, down 43p at 836p and Xstrata off 44.5p at 877p. BHP Billiton dropped 59p at 1,631p and Lonmin slumped 73p at 1,462p.

Oil producers suffered with the general market, despite crude remaining above $77 a barrel, with Shell off 13p at 1,757.5p, BP down 7p at 577.7p and BG Group 12p lower at 1,062.5p.

Aerospace engine maker Rolls-Royce dived 10.6p at 441.1p on saying it expects profits to be similar to 2008. Rolls-Royce said the forward order book stood at record levels despite some cancellations.

Primark and Silver Spoon sugar owner Associated British Foods, dropped 14p at 819p, despite reporting a 4% rise in full year adjusted pre-tax profit and saying it was confident of future progress.

Service company Serco was the sole blue chip gainer at midday, up a penny at 508p, continuing to benefit from yesterday's news of a major new contract with the London Borough of Bexley.

Homeware retailer Dunelm provided a rare sign of improvment in the retailers, up 21p at 347p after reporting continued strong sales growth as it benefited from the demise of rivals such as Woolworths.

Bus and train operator Stagecoach skidded 3.5p at 139.7p on reporting overall profitability since end-April has remained in line with group expectations, although growth was slowing.

Story provided by Business Financial Newswire