Morning Markets: FTSE spooked by Lloyds cash call reports

The FTSE 100 has fallen sharply in opening exchanges following reports Lloyds may tap shareholders for funds to reduce the cost of participating in the Government's toxic asset scheme.

After reaching a 10-month high on Friday, the benchmark index shed 32.42 points, or 0.7%, to stand at 4,699.14 just past 9:30am. Banks led the losers, with Royal Bank of Scotland extending Friday's losses, down almost 7% to 43.78p, as investors digested half-year results showing the bank suffered rocketing impairment charges and included a bleak outlook from management. Lloyds Banking Group fell 4.41% to 97.50p, after newspaper reports suggested it could raise between £10bn and £15bn to either partially or fully withdraw from the Government's scheme to insure bad bank debts. The ba...