- Banks sold off as Greek talks continue. - S&P downgrades three French banks. - IMF cuts world GDP growth forecast. UK stocks were off their intraday lows but still finished firmly in the red on Tuesday, with global markets in negative territory as European leaders continue to argue over Greece. While the attention seems to be mostly on Athens, the downgrade of three French banks did not do much to help the mood. Neither did the International Monetary Fund (IMF) which cut its estimate for world economic growth in 2012 to 3.3%, from 4% previously.ALL EYES ON THE EUROZONE Eurozone finance ministers rejected what the Institute of International Finance (IIF) considers to be their "maximum offer that is consistent with the voluntary debt exchange". The bone of contention lies in the fact that the IIF insists on an average 4% interest rate for the life of the new debt, while Greece refuses to pay above 3.5%. The Eurogroup members that met yesterday in Brussels decided to back Athens. Also weighing on sentiment were reports that ratings agency Standard & Poor's is likely to downgrade the nation's ratings to 'selective default' after its debt restructuring."These seem to be pretty flimsy excuses for profit-taking though since it appears that negotiations may drag on into mid-February anyway," said market analyst Colin Cieszynski from CMC Markets. "Overall, today appears to be a normal day of backing and filling as markets consolidate a strong start to the year," he said.Meanwhile, Societe Generale, Credit Agricole and Group BPCE are the first major French banks to have their ratings cut after France lost its own triple-A rating. The ratings agency explained that the new ratings incorporate one level of government support rather than two levels that an AAA-rated sovereign would provide. Banks across Europe were out of favour today as risk appetite was scaled back with the stocks on the STOXX Europe 600 Banks index falling an average 1.1%.In other news, concerns over Portugal's finances have also arisen. The country may need a second bailout if it does not raise the necessary financing on the open market next year. The Wall Street Journal (WSJ) has reported that there are concerns amongst some market participants that the IMF will impose new requirements on the Iberian nation if it becomes apparent that it is unable to return to the market next year. BANKS DRAG FOOTSIE LOWER UK banking giants Lloyds, Royal Bank of Scotland and Barclays were leading the fallers on the FTSE 100 by midday, falling in sympathy with their European counterparts as the debt crisis rages on. Shares in the latter also took a hit from a note out from Exane BNP to the effect that its BarCap investment banking arm will require significant restructuring. Other financial stocks didn't fare much better with Ashmore and Hargreaves Lansdown out of favour after RBS analysts downgraded their ratings on both stocks. HSBC fell by a lesser 0.9% after announcing that it is to exit Costa Rica, El Salvador and Honduras in a deal with Colombian group Banco Davivienda worth $801m.Cairn Energy was a poor performer after withdrawing its proposal to give its non-executive Chairman, Sir Bill Gammell, share options worth £2.5m after institutional shareholders opposed the move. Defensives were very much in demand with utilities and tobacco stocks among the high risers as risk appetite is scaled back. International Power, National Grid, SSE, Imperial Tobacco and British American Tobacco finished strongly.Accountancy software group Sage underwhelmed investors after saying that trading since the beginning of October has been in line with expectations, while Land Securities was also lower after announcing a change at the Chief Executive Officer position. FTSE 250 MOVERS: CHEMRING & MINERS SOLD OFF Military equipment maker Chemring was the heavy faller after its Chairman said that the "continuing problems of the Eurozone and the impact of possible sequestration in the US indicate that our traditional markets will not be any easier this year". Nevertheless, the firm saw an improvement in full-year underlying profit and revenue. Mining peers New World Resources, Talvivaara and African Barrick Gold were among the worst performers. Allied Gold followed suit despite saying it aims to up production by 75% in 2012 as it improves recovery methods and efficiency. PZ Cussons, the 'Imperial Leather' soap maker, warned that full-year profits will be at the lower end of market expectations, as it struggles with problems largely beyond its control, including civil unrest in Nigeria, its largest market. BCFTSE 100 - RisersInternational Power (IPR) 328.00p +2.40%Weir Group (WEIR) 1,927.00p +2.28%Centrica (CNA) 287.50p +1.81%BG Group (BG.) 1,472.00p +1.59%Diageo (DGE) 1,408.50p +1.51%SSE (SSE) 1,253.00p +1.38%National Grid (NG.) 622.00p +1.30%BT Group (BT.A) 208.80p +1.26%Essar Energy (ESSR) 137.10p +1.11%United Utilities Group (UU.) 599.00p +0.84%FTSE 100 - FallersPearson (PSON) 1,183.00p -4.29%Royal Bank of Scotland Group (RBS) 27.05p -3.87%Hargreaves Lansdown (HL.) 431.00p -3.43%Cairn Energy (CNE) 282.40p -3.35%GKN (GKN) 207.90p -3.03%Eurasian Natural Resources Corp. (ENRC) 711.00p -3.00%Lloyds Banking Group (LLOY) 31.68p -2.78%InterContinental Hotels Group (IHG) 1,304.00p -2.54%CRH (CRH) 1,298.00p -2.41%Kazakhmys (KAZ) 1,106.00p -2.38%FTSE 250 - RisersCentamin (DI) (CEY) 97.25p +4.12%Carpetright (CPR) 630.00p +3.79%Phoenix Group Holdings (DI) (PHNX) 580.00p +2.84%Exillon Energy (EXI) 267.50p +2.10%JD Sports Fashion (JD.) 723.00p +1.97%Drax Group (DRX) 519.50p +1.86%Jupiter Fund Management (JUP) 225.00p +1.86%Spirit Pub Company (SPRT) 49.00p +1.55%Berendsen (BRSN) 460.80p +1.50%FirstGroup (FGP) 310.80p +1.30%FTSE 250 - FallersChemring Group (CHG) 386.50p -13.92%Cable & Wireless Worldwide (CW.) 21.75p -9.00%Ocado Group (OCDO) 80.15p -6.37%New World Resources A Shares (NWR) 444.90p -5.34%Logica (LOG) 77.50p -5.14%PZ Cussons (PZC) 296.00p -4.82%Aquarius Platinum Ltd. (AQP) 178.00p -4.81%Renishaw (RSW) 1,155.00p -4.55%Talvivaara Mining Company (TALV) 343.00p -4.48%RIT Capital Partners (RCP) 1,187.00p -3.96%
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