FTSE reverses early gains by midday as investors reconsider

MIDDAY REPORT: Headline shares reversed early gains by midday as investors took a less sanguine view of the agreement of Ireland to accept a massive bailout, with bankers turning tail and miners growing weaker.

At high noon, the FTSE100 was downd 18.36 points at 5,714.47 with the FTSE250 up 40 points at 10,867.1 and the FTSE Smallcaps slightly better at 3,030.41.

US stock futures made modest moves higher following news that Ireland has formally applied for financial aid.

Dow Jones Industrial Average futures gained 12 points at 11,191, S&P500 futures rose 3 points at 1,201 and Nasdaq 100 futures added 9 points at 2,142.

Markets in London today were initially buoyed by news that Ireland has secured massive funds to bail out its banking system, but the early euphoria quickly turned to doubts, especially when it appeared that the UK is provide up to £7bn of the bail-out total.

The UK banking sector emitted an opening corporate sigh of relief on the news from Dublin but it soon turned sour as the reality sank in that Eurozone debt problems were far from solved.

After the opening flurry, Royal Bank of Scotland tumbled to the foot of the FTSE league, down 1.26p at 40.51p, Barclays lost 2.5p at 271.7p and Lloyds Banking Group fell 1.34p at 65.38p.

Insurers were among the losers at midday, with Prudential down 9p at 605.5p, Aviva off 2.2p at 396.8p and Legal & General 1.8p weaker at 95.75p.

Anglo American slipped 13p at 2,926p on announcing it has put up for sale its Callide thermal coal mine in Australia.

Oil producers lost way in the general turmoil, although crude remained close to $83 a barrel, with BP down 1p at 434.85p and Shell 8.5p lower at 1,992p.

Interdealer broker ICAP slumped 9.2p at 465.8p, on being cut to hold from buy at Execution Noble, although the target price stays 510p.

Supermarket operators also slipped after a bright start, with Tesco down 2.7p at 423.95p, despite reporting strong sales growth in Asia. Morrisons fell 0.4p at 274.1p and Sainsbury edged down 2.4p at 364.4p.