LONDON (ShareCast) - Fears about the banking sector resurface today to drag London lower, with rumours circulating in the market that a UK bank is in need of a helping hand from the Bank of England.

Comments from FSA chief executive Hector Sants that the banks will have to revert to more traditional ways of making money and eschew complicated products that package and sell on cheap loans gave further cause to mark down banks.

Shares in mortgage lender HBOS slumped as it warned fierce competition in the mortgage market and higher funding costs had squeezed margins and could get worse. Elsewhere in the sector Alliance & Leicester, Royal Bank of Scotland, Lloyds TSB and Barclays all see recent gains creamed off by profit-takers.

South African insurer Old Mutual is also lower despite reporting that funds under management (FUM) rose 18% in the year.

Fellow insurer Royal & Sun Alliance has surrendered earlier gains. RSA saw operating profits rise 4% despite the impact of the summer floods in the UK and hiked dividends by 19%.

AstraZeneca falls back after it said it will not proceed with the next stage of trials for Recetin, its lung cancer treatment, because results failed to impress.

Housebuilders are doing well with Kier on the rise after it posted record levels of revenue and profit for the half-year despite tough conditions in its homes business and hiked dividends by 87.5%.

Fellow housebuilder Barratt shrugged off recent gloom surrounding the housing sector with solid interim profits and a comment that conditions had improved recently, despite its completions falling heavily in the first half.

The soaring oil price provides support for Royal Dutch Shell, Tullow and BP, the last mentioned ahead of a strategy presentation from its CEO today.

Mining stocks are also moderately firmer, although Lonmin is lower after its chairman sold more than £2m of shares in the company yesterday ahead of changes in capital gains tax rules.

Fund manager Henderson Group tops the FTSE 250 risers after it raised full year dividends by 94% as it saw full year operating profit jump 30%.

William Hill’s full-year pre-tax profits failed to meet expectations after a disappointing performance from the bookmaker's internet business. Pre-tax profits fell to £209.2m in the year ended 1 January compared with £235.4m last year and forecasts of between £212m and £222m.

Informa upped its dividend by 39% and said current financial uncertainties have so far not impacted the business publisher’s trading.

Profits below expectation in the UK and the Netherlands meant another disappointing performance from software group Logica CMG.

Logistics group TDG has received a bid approach worth 275p per share cash from 22% shareholder Laxey Partners.

Avingtrans rallies as the firm that makes stands for roadside speed cameras swung into a pre-tax profit and said the short term outlook “appears positive”.

Electronic manufacturing group Stadium gains ground after it reported a 23% increase in full year profit before tax and sale of property to £2.66m.

Support services specialist Serco, best known in London for operating the Docklands Light Railway, is heading south despite reiterating its forecast of double-digit sales growth “for the foreseeable future” as orders at the end of 2007 hit record levels and profits met forecasts.

Logistics group TDG is wanted on news of a bid approach worth 275p per share cash from 22% shareholder Laxey Partners. Sector peer Wincanton rises in sympathy.

Shares in Mapeley are still on the rise today after the property specialist said yesterday it has received an indicative non-binding proposal from an unnamed suitor.

Shares in Cape Lambert Iron are friendless after the company ruled out considering any return of capital to shareholders until a significant proportion of funds are received from the sale of the Cape Lambert iron ore project to China Metallurgical Group.

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