Banks dragged London’s leading shares index lower today after Chancellor George Osborne said he would push through plans for a radical industry shake-up.
The chancellor confirmed he had accepted the key recommendations of the Independent Commission on Banking’s (ICB) report, which includes requiring banks to ring-fence their retail and investment arms.
This, and continued gloom over the eurozone, hit banking shares and saw the FTSE 100 Index fall 22.4 points to 5,365.
Lloyds Banking Group fell 1p to 23.5p, and Barclays was off 5.5p at 166p. Shares in Royal Bank of Scotland were also hit as the chancellor announced it would further scale down its investment banking arm and focus more on the UK. Its shares were down 0.6p at 19.4p.
Defensive shares topped the risers board, with Imperial Tobacco up 30p to £23.55 and pharmaceuticals firm Shire added 40p to £21.50.
Music retailer HMV was another stock to come under pressure after it reported half-year losses of £45.7million in the 26 weeks to October 29. Shares fell 25%, or 1p to 2.9p.
Yellow Pages owner Yell’s shares rose 0.03p to 5.7p, after it said the majority of lenders had agreed to a new deal that will give it increasing room under its banking covenants and buy it some time to reinvent itself online.
The biggest Footsie risers included Aggreko ahead 31p at £18.48, Intercontinental Hotels Group up 15p at £10.82, and Unilever ahead 29p at £20.96.
The biggest Footsie fallers included Vedanta Resources off 39p at £10.46.
Elaine McLachlan, of investment manager and financial planning specialist Brewin Dolphin in Inverness, noted that risers included aviation support services group, John Menzies, up 3.8% to 525p, building and engineering firm, J Smart & Co, rising 3.1% to 335p and computer services firm, IndigoVision gaining 2.8% to 275p.
Fallers included oil exploration and development company, Xcite Energy off 10.46% to 88.13p, Nautical Petroleum dropping 3.8% to 254.5p and gas firm, Melrose Resources down 3.4% at 264.5p.