FTSE 100 falls below 5,000 mark

| November 3, 2009 | 0 Comments
FTSE 100 falls below 5,000 mark

The UK’s FTSE 100 share index fell below the 5,000 mark today due to the overhaul of the UK’s banking sector.

At 11:42 am, London’s FTSE 100 index was 111.56 points lower at 4,992.94, dipping below the 5,000 level for the first time since early October.

Earlier today, the Treasury confirmed plans for Royal Bank of Scotland (RBS) and Lloyds Banking Group to sell off bank branches.

The shake-up comes as the Government hopes to create more competition within the industry.

RBS will sell 318 branches, while Lloyds has agreed to sell 600 of its retail branches with disposals including Lloyds TSB Scotland and mortgage broker, Cheltenham & Gloucester, as well as the Intelligent Finance online business.

Furthermore, it has been confirmed that Lloyds will embark on a £13.5 billion rights issue, as well as a £7.5 billion debt swap.

The rights issue means Lloyds will avoid the Government’s Asset Protection Scheme (APS).

Furthermore, the European Commission revealed that losses in the European sector could reach €400 billion (£360 billion) this year following a series of stress tests at major European banks.

European shares were down with Germany’s Dax index and France’s Cac 40 losing around 2%.

Asian markets had also closed lower earlier in the day.

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