At midday, the FTSE100 was down 45.84 points at 5,291.16 with the FTSE250 off 86.43 points at 9,945.17 and the FTSE Smallcaps 7.52 points lower at 2,711.32.

NEW YORK

Moves by China to ease reserve requirements for its banks, was seen as a positive in the US, giving stock futures a boost.

Dow Jones Industrial Average futures were up 63 points at 11,628, S&P500 futures rose 7 points at 1,203 and Nasdaq 100 futures gained 15 points to 2,228.

LONDON MARKETS

A wide-ranging rating downgrade of global banks by Standard & Poor's set the tone for a negative start in London, but the bears soon ran out of puff and by midday the main index was trading firmly higher on hopes that China moves to stimulate growth would help demand for goods and services.

In the banking sector, Barclays took a big hit early on, but rallied strongly, adding 5.08p at 174.08p by midday. Royal Bank of Scotland rose 0.79p at 20.31p, HSBC gained 1.68p at 488.23p and Lloyds improved 0.93p at 24.11p.

Insurers also recovered from a stuttering start, with Prudential advancing 13p at 623.5p, Aviva up 4.3p at 307.1p and Standard Life 3.6p higher at 200.5p.

Mining issues took heart from the positive moves in China, with Antofagasta the best of them, up 43.5p at 1,127.5p. Kazakhmys rose 26.5p at 895p and Rio Tinto climbed 53.75p at 3,192.25p.