Market Report: Lloyds the biggest loser on a blue Monday for Britain's banks

After a 10 per cent rally on Friday, Brent crude oil dropped 1.4 cent, or 4.4 per cent

Lloyds was the banking sector’s biggest loser (Getty)

It was a blue Monday for Britain’s banks, which led the FTSE 100 back into negative territory for the tenth time this month. Lloyds was the sector’s biggest loser, shedding 3.72p to close at 63.14p, after JPMorgan downgraded its price target on the stock over to the prospect of interest rates staying lower for longer. But Barclays, down 8.9p to 181.85p, and Royal Bank of Scotland, 10.8p lower at 251.3p, were also punished amid a Europe-wide sell-off of banking shares blamed on concerns about Spain’s political uncertainty and Italy’s bad loans. Their losses, plus another sharp decline in oil prices, prompted the FTSE 100’s 23.01-point retreat to 5,877.

After a 10 per cent rally on Friday, Brent crude oil dropped 1.4 cent, or 4.4 per cent, to $30.78 a barrel as the Iraqi oil ministry stoked oversupply fears with an announcement of record output in December. That weighed on BP, which fell 2.55p to 350.15p, and Tullow Oil, which ended 7.5p lower at 140.3p. In contrast, fellow mid-cap stock Ophir Energy was a top riser, climbing by 3.85p to 88p after it signed an agreement with Schlumberger on its Fortuna project in Equatorial Guinea.

Back on the blue-chip leaderboard, BT was still smarting from the news that a cross-party group of 121 MPs, led by Grant Shapps, had backed a report calling for the separation of its broadband provider Openreach. Its shares slipped by 16.25p to 471p.

Miners were again under pressure as metals prices tumbled. Rio Tinto was 44.5p cheaper at 1609p while Antofagasta and BHP Billiton slid by 9p to 363.2p and 9.1p to 639.8p, respectively. The biggest casualty of the day, however, was Kingfisher, down 21.1p, or 6.1 per per cent, to 323.9p, as its investment plan failed to impress.

Imagination Technologies escaped stock-market gloom after it said it was ready to cut costs given “the challenges it is facing in the current economic backdrop of the industry”. Imagination, whose shares rose 20 per cent to 146.75p, responded to a report that it could sell its Pure digital radio arm, saying it was “reviewing its strategic options for this business”.