FTSE 100 continues slump

The FTSE continued its slump in early trading this morning as further gloomy news dragged the index lower by 12 points to 4,386.49.

After opening slightly higher at 4,407.24, the UK's benchmark index immediately tumbled, led by a sharp decline in hedge fund Man Group, whose stock fell 8.10 per cent by 08:11 GMT.

Rail and bus operator First Group followed with a fall of 8.07 per cent, on a third quarter fall in revenues for its Greyhound division in the US.

Banking giant HSBC also fell sharply in early trading and was down by 4.84 per cent by 08:12, following overnight falls on Hong Kong's Hang Seng index.

An analyst note from Morgan Stanley said the bank's dividend may be halved and HSBC may need to raise cash through a rights issue, sending share prices on the Hang Seng plunging six per cent.

Rival UK bank Barclays also saw its share price fall this morning, by 2.47 per cent, after reports yesterday of job cuts.

Several stocks rose on the FTSE after opening, however, led by publishing group Reed Elsevier, which continued last night's rally to jump 3.62 per cent.

Data specialist Experian also saw its share price rise by 3.43 per cent, while insurer Old Mutual was up by 2.35 per cent.

Overnight, the US Dow Jones index fell 0.3 per cent, while in Asia Japan's Nikkei 225 rose 0.29 per cent and the Hang Seng index rose 0.27 per cent.