London midday: Banking shares lead equities lower

London stocks slid on Friday as banking shares were rattled by news US authorities have asked Deutsche Bank for $14bn to settle an investigation.

The US Department of Justice has requested $14bn from Deutsche Bank to settle an investigation into mortgage-backed securities.

The claim was much bigger than expected with Deutsche Bank saying it "has no intention to settle these potential civil claims anywhere near the figure cited". Negotiations are expected to last several months.

Royal Bank of Scotland could also face a fine from the US authorities for mis-selling mortgage bonds in the run up to the banking crisis.

Neil Wilson, markets analyst at ETX Capital, said: “RBS could have to pay up to $13bn to settle the claims. Even a third of this figure which deliver a crippling blow to the lender, making its return to profitability even further off. It would also derail plans to return the bank to private ownership any time soon.

“After its latest loss, RBS has notched up £50bn in losses since the financial crisis – more than the £45bn stumped up by taxpayers to save the bank.”

RBS was the biggest faller on the FTSE 100 at midday followed by Standard Chartered and Barclays.

Weighing on sentiment elsewhere, oil prices dropped on news of rising Iranian exports and returning supplies from Libya and Nigeria following interruptions. Brent crude fell 1.7% to $45.78 per barrel and West Texas Intermediate declined 1.6% to $43.20 per barrel at 1156 BST.

Meanwhile, traders are awaiting US inflation data at 1330 BST with analysts expecting an improvement in August.

The US also sees the release of the University of Michigan’s consumer confidence survey at 1500 BST.

On the company front, private healthcare provider Spire Healthcare surged following a report that peer Mediclinic was preparing a bid for the remainder of the company.

Aviation support and aftermarket services company BBA Aviation rose after announcing that, after a number of approaches and a formal review, it has reached agreement with John Menzies on the terms of the sale of commercial aviation services subsidiary ASIG for $202m cash.

Supermarket retailer Wm Morrison gained ground after Exane BNP Paribas upgraded the stock to ‘neutral’ from ‘underperform’ and lifted the target price to 200p from 165p following its first-half results on Thursday.

Acacia Mining shares declined as it said output at its Bulyanhulu operations was being hampered by repeated overheating of the ball mill trunnion bearing.

Market Movers

FTSE 100 (UKX) 6,713.36 -0.25%
FTSE 250 (MCX) 17,820.59 0.39%
techMARK (TASX) 3,489.14 0.50%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,050.00p 2.24%
Burberry Group (BRBY) 1,287.00p 2.06%
AstraZeneca (AZN) 5,092.00p 1.96%
Morrison (Wm) Supermarkets (MRW) 212.00p 1.87%
Provident Financial (PFG) 2,954.00p 1.51%
Sky (SKY) 844.50p 1.38%
BT Group (BT.A) 383.90p 1.05%
Hammerson (HMSO) 569.00p 0.98%
Next (NXT) 5,005.00p 0.97%
Vodafone Group (VOD) 221.45p 0.82%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 184.90p -4.79%
Standard Chartered (STAN) 604.30p -3.19%
Barclays (BARC) 164.50p -2.95%
Fresnillo (FRES) 1,611.00p -2.13%
BAE Systems (BA.) 538.50p -1.82%
Micro Focus International (MCRO) 2,132.00p -1.34%
Prudential (PRU) 1,347.00p -1.28%
ITV (ITV) 195.80p -1.26%
Coca-Cola HBC AG (CDI) (CCH) 1,706.00p -1.22%
BP (BP.) 416.20p -1.18%

FTSE 250 - Risers

Spire Healthcare Group (SPI) 391.80p 8.56%
Galliford Try (GFRD) 1,284.00p 6.03%
Euromoney Institutional Investor (ERM) 1,160.00p 5.17%
SVG Capital (SVI) 683.00p 5.00%
JRP Group (JRP) 120.50p 4.78%
IP Group (IPO) 196.00p 4.37%
Evraz (EVR) 136.00p 3.82%
TalkTalk Telecom Group (TALK) 198.40p 3.71%
Countrywide (CWD) 237.40p 3.62%
Daejan Holdings (DJAN) 5,825.00p 3.37%

FTSE 250 - Fallers

Acacia Mining (ACA) 453.60p -9.28%
Sports Direct International (SPD) 283.40p -2.41%
Centamin (DI) (CEY) 139.00p -1.97%
Amec Foster Wheeler (AMFW) 537.00p -1.83%
Polymetal International (POLY) 988.50p -1.74%
Just Eat (JE.) 545.00p -1.62%
Petrofac Ltd. (PFC) 799.50p -1.60%
McCarthy & Stone (MCS) 167.90p -1.58%
CLS Holdings (CLI) 1,571.00p -1.50%
Hochschild Mining (HOC) 251.40p -1.49%