According to the Financial Times, the government is considering buying up the remaining shares in Royal Bank of Scotland (RBS) that it does not already own in an effort to kick start lending to businesses, news which pushed the stock into the bottom spot on the FTSE. The paper claims ministers are becoming "exasperated" that the bank, which is 83% owned by the taxpayer, is not lending enough to the British economy.
The firm is also expected to incur a £300m one-off charge in relation to IT breakdowns at Natwest and two mis-selling scandals.
Temporary power and temperature control group Aggreko was also lower after its first-half figures. Investec analysts said this morning that the results were "excellent" but the lack of upgrades to consensus forecasts are likely to disappoint.
Also down was defence contractor BAE Systems which is suffering from reduced military spending in both the US and UK, while a crucial fighter jet deal with Saudi Arabia has been hit by delays. First-half sales were down 11%.
Meanwhile, medical devices specialist Smith & Nephew rose despite reporting a slight decline in second-quarter trading profit and revenue, as it whacked up its dividend, embarking on a progressive dividend policy on the back of the success of its recent restructuring.
RSA Insurance Group saw its shares rise higher, even though profits fell by more than a third. This may have been due to a strong performance in its overseas operations.
Asset manager Schroders advanced after reporting an increase in assets under management over the first half; however, profits slipped year-on-year.
FTSE 100 - Risers
Smith & Nephew (SN.) 675.00p +2.35%
Schroders (SDR) 1,315.00p +1.78%
RSA Insurance Group (RSA) 111.10p +1.00%
Next (NXT) 3,459.00p +0.93%
National Grid (NG.) 670.00p +0.68%
InterContinental Hotels Group (IHG) 1,590.00p +0.51%
Datafeed and UK data supplied by NETbuilder and Interactive Data.
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