BANKS dragged the FTSE 100 lower in extremely light trade yesterday after the British government estimated the cost to banks of reforming the UK banking system could be as much as £8bn.
London’s blue chip index was down 22.35 points, or 0.4 per cent, at 5,364.99, with volumes at just 67 per cent of their already weak 90-day average.
“Most active market participants seem to have had enough of 2011 and are prepared to sit tight and wait and see what 2012 brings,” said Oliver Wallin, investment director at Octopus Investments.
“It seems that the likelihood of another seasonal ‘Santa rally’ is diminishing.”
Lloyds Banking Group slipped 4.2 per cent, while Royal Bank of Scotland lost three per cent.
British online grocer Ocado slipped 16.9 per cent after issuing a profit warning.
Entertainment retailer HMV fell 27.7 per cent after it warned it could go out of business as a downturn in consumer spending accelerates the long-term decline of its core CDs and DVDs markets.