LONDON (ShareCast) - London’s top stocks have drifted lower after Wall Street opened in the red for the second day in a row.

Banks are among the main fallers with Barclays, HBOS and Royal Bank of Scotland all lower.

RBS has given up trying to offload ABN AMRO's Australia and New Zealand operations after a potential taker lost interest. Commonwealth Bank of Australia’s decisions to scrap talks means the UK bank will hang onto the business, integrating it with existing operations in the region.

Consumer stocks are also under pressure with the Bank of England today issuing a gloomy assessment of the UK's prospects. The Bank expects little or no growth in the UK economy for the next two years, though inflation should peak at 5% it says.

Enterprise Inns, Marks & Spencer and Kingfisher are all well down.

The higher oil price is also weighing on sentiment, with fuel guzzling cruise operator Carnival a heavy faller.

Metal prices are also advancing, boosting miners such as Xstrata, Kazakhmys and Anglo American.

Meanwhile, Lonmin has moved to bolster its defences against Xstrata’s “opportunistic” pre-conditional offer, claiming miners should be valued on their long-term fundamentals.

Friends Provident falls back after Merrill Lynch downgraded the insurer to ‘underperform’ from ‘neutral’ to reflect its stalling disposal programme.

Ex-dividends are also proving a drag while housebuilders have given back some of their recent gains led by Barratt and Taylor Wimpey.

Travel firm Thomas Cook said current trading continues to be strong in the Summer 2008 season with early indicators for Winter 2008/09 and Summer 2009 ahead of last year.

Bid target British Energy's underlying profit nearly halved to £129m, from £253m, in its first quarter to June, blamed on lower output and higher costs incurred in respect of the BCU modifications. The group, which faces a takeover from French group EDF, added that its Heysham 1 Reactor 1 is close to a return to service.

Insurer Prudential has appointed former Man Group boss Harvey McGrath as its new chairman to replace David Clementi.

Expectations of a poor economic environment in core markets prompted JP Morgan to lower its rating on electrical retailer DSG International to ‘underweight’ from ‘neutral’ sending its share price crashing.

Citigroup has raised its target price on Schroders to 875p from 770p following the fund manager’s first half results last week.

Ryanair’s pugnacious boss, Michael O’Leary, has predicted that the Irish no-frills airline will be among the few European carriers to grow strongly this winter.

Software group Micro Focus says it achieved its targets for both organic revenue growth and EBITDA margins in the three months to July and reiterated its target this year of double digit organic revenue growth at constant currency at maintained margins. "We are encouraged by the progress made across the group in our first quarter of trading," chief executive Stephen Kelly said.

Aim-listed Kurawood has slumped on a warning it is in funding talks, though more positively the boom in performing arts interest among children has given Stagecoach Theatre a boost.

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