London midday: Markets fall as caution sets in

Mining and banking stocks were weighing on the FTSE 100 on Friday morning as the index extended losses following yesterday's dramatic sell-off.Worries about the Federal Reserve scaling back its asset purchase programme prematurely and a negative reading of factory activity in China saw markets across the globe tumble on Thursday, with the FTSE 100 falling 2.1% and Japan's Nikkei dropping a massive 7.3%. Many saw these sharp swings as inevitable with investors looking to book profits after the strong gains seen by equity markets so far this year - before yesterday's slump, the FTSE 100 had risen nearly 16% since the start of 2013. Stocks Stateside fared a little better last night, finishing with only moderate losses, as better-than-expected US jobless claims and new-homes sales data tempered concerns about the world's largest economy.This morning, London's benchmark index dropped to a 10-day low despite economic data from Germany providing some cheer. The Ifo business climate index released this morning rose to 105.7, from the prior 104.4, beating the slight advance to 104.5 that analysts had expected. Expectations for the next six months however remained unchanged amidst meagre domestic growth. "Much stronger than expected measures on the German IFO business survey weren't enough to inspire a return to 'buy the dip mode' which suggests bulls may already be treading more cautiously," said Matt Basi, the Head of UK Sales Trading at CMC Markets.Investors scared to take riskWith corporate news thin on the ground this morning, fragile market sentiment was dominating the direction as riskier assets such as miners and banks remained out of favour after yesterday's sharp falls. These sectors have gained strongly so far this year as stimulus measures from a number of central banks had improved the outlook for the global economy.ENRC and Polymetal were among the worst performers as they tracked metals prices lower, followed closely behind by RBS and HSBC. Even Standard Chartered was registering losses despite Investec labelling the stock as one of the cheapest in the UK banking sector.Retail group Next was also a heavy faller after Morgan Stanley downgraded the stock from 'equal weight' to 'underweight', saying it prefers sector peer Marks & Spencer.Smiths Group, the global technology firm, was slightly higher after saying that its full-year guidance remains unchanged after underlying revenues and profits in the first three quarters were ahead of last year.IT infrastructure firm Computacenter rose after giving details of a £75m cash return for investors.Engineering data and IT group AVEVA was extending gains after yesterday's results in which it revealed a £100m cash return to shareholders. Credit Suisse raised its target price for the shares this morning.FTSE 100 - RisersSmiths Group (SMIN) 1,352.00p +1.27%Meggitt (MGGT) 528.50p +1.25%Aberdeen Asset Management (ADN) 478.60p +0.76%Marks & Spencer Group (MKS) 475.60p +0.74%Shire Plc (SHP) 2,149.00p +0.70%Babcock International Group (BAB) 1,162.00p +0.69%Vedanta Resources (VED) 1,294.00p +0.62%Imperial Tobacco Group (IMT) 2,391.00p +0.55%Rolls-Royce Holdings (RR.) 1,196.00p +0.50%Carnival (CCL) 2,240.00p +0.31%FTSE 100 - FallersEurasian Natural Resources Corp. (ENRC) 257.10p -3.16%Royal Bank of Scotland Group (RBS) 328.10p -2.70%Next (NXT) 4,585.00p -2.26%Polymetal International (POLY) 650.50p -2.18%Aggreko (AGK) 1,722.00p -2.05%International Consolidated Airlines Group SA (CDI) (IAG) 273.00p -1.97%HSBC Holdings (HSBA) 727.90p -1.87%ITV (ITV) 130.00p -1.81%TUI Travel (TT.) 356.10p -1.79%Lloyds Banking Group (LLOY) 59.56p -1.75%FTSE 250 - RisersBTG (BTG) 354.20p +4.33%Aveva Group (AVV) 2,397.00p +4.08%Computacenter (CCC) 453.50p +2.58%Ted Baker (TED) 1,500.00p +2.18%Dairy Crest Group (DCG) 479.90p +2.11%AZ Electronic Materials SA (DI) (AZEM) 330.50p +2.10%Heritage Oil (HOIL) 155.10p +2.04%Bank of Georgia Holdings (BGEO) 1,776.00p +1.72%FirstGroup (FGP) 136.90p +1.71%Homeserve (HSV) 260.10p +1.60%FTSE 250 - FallersHalfords Group (HFD) 314.00p -5.79%Close Brothers Group (CBG) 1,028.00p -5.69%QinetiQ Group (QQ.) 190.10p -3.99%Ocado Group (OCDO) 266.40p -3.69%Ferrexpo (FXPO) 169.10p -3.59%Pace (PIC) 250.40p -3.47%Rank Group (RNK) 148.00p -2.95%Kazakhmys (KAZ) 330.90p -2.93%Barratt Developments (BDEV) 321.10p -2.90%Salamander Energy (SMDR) 165.10p -2.88%BC