FTSE 100 opens lower as bank stocks fall

Tuesday, 10 June 2008 12:00

The FTSE 100 opened lower this morning, trading at 5,848.10 by 08:06 BST as gloomy economic indicators sent stocks plunging.

Housing market figures released this morning by the Royal Institute of Chartered Surveyors (Rics) showed transaction levels are at their lowest in 30 years.

And while the British Retail Consortium (BRC) said retail sales picked up in May, as warmer weather encouraged spending, analysts warned underlying trade is still tough.

In addition, Tesco reported non-food sales have eased as consumers tighten their belts and the UK's biggest retailer reported slower sales growth.

With a stalling housing market, inflation worries and fresh losses announced last night by US bank Lehman Brothers, UK bank stocks were among the biggest fallers on the FTSE 100 index in morning trading.

Royal Bank of Scotland (RBS) shares fell 3.32 per cent to 226p after it sold shares not subscribed for in its record rights issue for 230p apiece, while Barclays dropped 2.98 per cent to 309p.

HBOS was also down 2.77 per cent and Lloyds TSB fell 1.89 per cent.

Tesco was also one of the biggest losers on the index, falling 3.11 per cent immediately after market opening.

Oil and commodities continued to trade higher, sending mining stocks up again. Kazakhmys climbed 2.77 per cent to 1,672p, while Anglo American rose 1.55 per cent to 3,349p.

Last night, oil shares rose as US crude almost touched $137 a barrel, although this was off a Friday high of almost $139 a barrel.

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