LONDON (ShareCast) - London’s top stocks are deep in the red as financials suffer on renewed worries that another major US bank could collapse in the next few months.

Former chief of the International Monetary Fund, Professor Kenneth Rogoff, spooked the US banking sector yesterday when he warned that the credit crunch could claim another high profile victim in the US banking sector. “I think the financial crisis is at the halfway point, perhaps,” said Professor Rogoff, speaking at a conference in Singapore, before adding that the worst may be yet to come.

UK banks fall back in sympathy with their American counterparts, with HBOS, Lloyds TSB and Barclays the worst affected.

Elsewhere in the financial sector, insurers are friendless, with Legal & General, Prudential, Standard Life and Aviva leading the sector lower.

Property groups are also weak after property group Brixton slumped into an interim loss of £237m after a property valuation hit of £245m. Net asset value tumbled from 545p to 448p. British Land, Hammerson and quasi-property groups such as pub groups Punch Taverns and Enterprise Inns are all taking a beating, with the former taking a further blow from JP Morgan, which has downgraded the stock in a bearish review of the pub sector.

Building supplies group Wolseley’s exposure to the US housing market has it under pressure as analysts in the US openly speculate about the prospect of a government bail-out of mortgage finance companies Fannie Mae and Freddie Mac.

Defensive stalwarts Scottish & Southern, Drax and National Grid are among the handful of risers.

Australian gas group Origin has again rejected BG's £6bn hostile bid as too low given its future prospects, adding a number of "global participants in the energy industry" had proposed building Australia's largest LNG project using Origin's coal seam gas reserves. BG is up, while Petrofac is also registering good gains.

Shares in Smith & Nephew are leading the risers as traders speculate the medical devices group is a possible bid target for US peer Zimmer Holdings.

Mail order group Findel's trading has been steady with sales in the 19 weeks to 15 August were up 2% over this time last year. Home Shopping has continued to make progress, it said, with sales from both credit and cash with order businesses 3% ahead of last year.

Elsewhere in the retail sector Comet owner Kesa Electricals gets a boost from Goldman Sachs, which has upgraded the stock to “buy” from “sell”.

Public sector consultant Tribal lifted interim profits by 38% to £9.1m adding it is encouraged by current trading. Revenue rose by 9% to 113.3m. "The pipeline of opportunities is improving and the board is confident about Tribal's prospects for the reminder of 2008 and beyond," it said in a statement.

Software house Innovation slumped after a cautious trading update though Ascribe is at its highest in over six months after admitting management are in talks about a possible buyout of the health IT group.

Trading of shares in Aurum Mining resumed at a sharply lower price after the company reached a settlement in its civil case against Marsa.

Plastics group Carclo reports the first three months of the new financial year are off to a promising start.

Housing repairs outfit Mears Group has upped half year profit by 25% and boasts an order book at record levels.

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