Lloyds Share News (LLOY)

Despite a modest start, the Footsie took a tumble during morning trade and stood at its lowest levels of the day by lunchtime, as the focus turned to Italy's soaring borrowing costs. Financials were leading the decline on the blue chip index.ITALIAN BOND YIELDS KEEP ON RISINGYields on benchmark 10-year Italian bonds have continued their surge, reaching 7.45% just after midday. Borrowing prices for Italy broke through the 7% barrier at around 10am (GMT), the level which economists see as unsustainable. One commentator called it 'game over' for Italy, predicting the IMF would have to bail the country out by the end of the year. However, there are fears that Italy, the third biggest economy in the eurozone with debts of £1.6tn - or 120% of GDP - simply has too much debt to be rescued. The spike in yields appears to have been prompted by LCH Clearnet, the London clearing house, which is reportedly demanding more collateral from the close of business tonight from investors trading Italian sovereign debt. The above seems to have quashed a short-lived feint higher by equities on the back of the Italian Prime Minister's announcement that he will resign. Silvio Berlusconi last night pledged to quit once Parliament has approved the annual budget, including the necessary austerity measures and economic reforms aimed at reviving the country's economic fortunes. FINANCIALS FOLLOW ADMIRAL LOWERAdmiral lost nearly 30% of its market value after warning that full-year pre-tax profits will be towards the lower end of market estimates if there is no reversal of the current trend of a higher than normal level of large insurance claims. Nevertheless, group turnover rose 30% in the third quarter.Banks were posting heavy losses with HSBC being no exception after announcing that underlying pre-tax profits fell from $4.6bn to $3bn in the third quarter. The group blames decreased revenues in its investment banking division, an adverse movement in its hedging strategy of $0.7bn and an increase in loan impairment charges, primarily in North America. Barclays, Royal Bank of Scotland and Lloyds were also lower. Elsewhere in the financial sector, acquisitive insurance group Resolution was also on the slide, despite announcing a 'transformational' outsourcing arrangement with Diligenta, an insurance services specialist that is part of Indian information technology (IT) contractor Tata Consultancy Services, that it says will save it pots of money. Tullow Oil fell nearly 6% after saying that a slower-than-expected ramp-up in the Jubilee field means that 2011 group production will now be lower than expected.DEFENSIVES IN DEMAND BUT SSE FALLSUnsurprisingly, among the (few) risers were the defensive stocks, with utilities (International Power and United Utilities) and telecoms firms (Vodafone) registering moderate gains. Sainsbury, the owner of Britain's number three supermarket chain, was among the better performers after seeing pre-tax profits rise 6.6% to £354m in the first six months of this year, a touch above analysts' expectations of around £350m. SSE, the gas and electricity provider usually seen as a defensive pick, fell over 2% after seeing adjusted pre-tax profit fall 25.4% in the six months ended 30 September.FTSE 250: CAPE PLUMMETS, FIRSTGROUP RISESCape, the support services provider to the energy sector, tumbled lower after saying that while revenues remain in line with expectations, it predicts that it will see "ongoing margin pressures in the Middle East and the risk of project scheduling delays during 2012".Bus and train firm FirstGroup was among the highest risers after saying that pre-tax profits in the first half were up 56.2% to £127.8m from £81.8m the year before. BCFTSE 100 - RisersSmith & Nephew (SN.) 549.50p +1.10%Sainsbury (J) (SBRY) 302.30p +0.67%International Power (IPR) 335.80p +0.63%United Utilities Group (UU.) 617.00p +0.41%Vodafone Group (VOD) 176.60p +0.34%FTSE 100 - FallersAdmiral Group (ADM) 849.50p -28.79%Resolution Ltd. (RSL) 252.00p -6.11%HSBC Holdings (HSBA) 506.10p -5.84%Tullow Oil (TLW) 1,353.00p -5.78%Barclays (BARC) 171.60p -5.71%Royal Bank of Scotland Group (RBS) 21.22p -4.97%Aviva (AV.) 308.60p -4.81%Lloyds Banking Group (LLOY) 27.66p -4.27%Schroders (Non-Voting) (SDRC) 1,135.00p -3.90%Capita Group (CPI) 669.00p -3.88%