Leading UK shares pared losses by mid-session today as investors digested the impact of US-led military strikes on Afghanistan and turned their attention to the opening Wall Street reaction.
Unease spread through transport shares, which were hit by news that railway operator Railtrack had gone into administration, with its shares suspended.
The benchmark FTSE 100 was down 62.6 points or 1.24 per cent at 4,973.4 by 11.25 a.m. GMT. The index fell as low as 4,902.7 in a slide from a three-week closing high on Friday. Expectations of a weaker start for US shares limited the rebound.
Banks led the retreat and knocked 27 points off the index amid worry about the implications of the air strikes in Afghanistan.
International banking group HSBC led its sector lower, shedding 3.2 per cent to 723p. Royal Bank of Scotland fell 3.8 per cent after Teather & Greenwood downgraded it to hold from buy.
Abbey National lost 5.1 per cent as the market shrugged off a company statement saying it planned to improve returns from its wholesale banking unit after announcing top management changes at this division.