Lloyds shares hit over Dubai fears

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The Independent Online

The FTSE 100 Index opened lower today as fears over the impact of the Dubai debt crisis continued to weigh on heavyweight banking stocks.

Lloyds Banking Group, which is the process of raising £13.5 billion from shareholders, fell 4 per cent - or 2.2p to 56.4p, while Royal Bank of Scotland shed 0.6p to 34.1p in the first hour of trading.

The FTSE 100 Index, which on Friday recovered some of the ground lost in the wake of the Dubai crisis, slipped 21.7 points to 5224.5.

Dubai's main stock exchange dropped more than 7 per cent and Abu Dhabi markets slid more than 8 per cent on the first day of trading since news that Dubai World, the emirate's investment and development engine, would seek a six-month delay in paying creditors on nearly 60 billion US dollars in debt.

Other fallers included London Stock Exchange, which is 22 per cent owned by Borse Dubai. Shares dropped 10p to 766p.

The biggest rise in the top flight came from TUI Travel after rival Thomas Cook posted full-year figures slightly ahead of expectations and said the outlook for next year remained positive.

Thomas Cook rose 4.9p to 221.1p, while Thomson Holidays owner TUI rose 7p to 250.7p ahead of its own figures later this week.