LONDON (ShareCast) - Footsie has slipped below 5,000 points for the first time since June 2005, ahead of what it expected to be a poor start on Wall Street.

Banks remain on the back foot, with HBOS, Royal Bank of Scotland and Barclays the major sufferers. Barclays confirmed it is still in talks with Lehman Brothers over the possible acquisition of certain Lehman Brothers assets on "attractive terms".

With oil slipping below $92 a barrel, oil stocks such as Cairn Energy, BG Group and John Wood Group are out of favour. Mining stocks are also sharply lower in line with weaker metal prices. Xstrata, ENRC and Anglo American lead the sector lower.

The shake out in the investment banking world is bad news for financial information company Thomson Reuters which looks set to lose blue-chip customers as industry consolidation takes place. Inter-dealer broker ICAP is another stock hit by turmoil in the broking community.

AIG's problems are weighing on the insurers with Old Mutual and Admiral deep in the red.

On the bright side, British Airways, Thomas Cook, TUI Travel, Easyjet, National Express and Ryanair all make good ground as analysts work out the profit boost from the lower oil price.

Pub groups have largely surrendered earlier gains but Enterprise Inns holds on to some of its gains, though they form only a fraction of what the share price lost yesterday.

Michael Page fell by a quarter after Adecco dropped plans to bid for UK recruitment agency after months of to and fro. "The response from Michael Page and its advisers has indicated that a recommended transaction would not be achievable on terms satisfactory to Adecco," the group said in a statement.

Debenhams perked up as it said trading in August showed a marked improvement over July but added that the UK retail sector continues to be adversely affected by wider economic concerns. The department store reported a 0.9% drop in like-for-like sales in the year to 30 August, while gross transaction value was 1.3% higher than the previous year.

Drugs firm AstraZeneca and partner Targacept Inc. said results from the Phase IIb clinical trial of AZD3480 for the treatment of Alzheimer's was inconclusive.

Animal feed group Genus reported a 40% jump in full-year adjusted pre-tax profit to £28.0m and said it remains confident for the year ahead. Revenue for the year to 30 June 2008 increased by 6% to £247m.

Bank note printer De La Rue's performance for the second quarter and the first half year was in line with the board's expectations. "We enter the second half year with a strong order book and the board remains confident in the trading outlook from continuing activities for the current year," it added.

Vehicle hire company Northgate said outlook for the current year is lower than the board's previous expectations due to the difficulties in the UK and Spanish economies. In the UK, the deteriorating economic environment has resulted in used vehicle market experiencing reductions in residual values of between 5% and 10%.

Standard Life and Vebnet have agreed terms for a recommended cash offer by Standard Life for Vebnet worth 260p per share or £24.2m in total.

Drug developer Alizyme edges higher on news it is it is to receive a $3m milestone payment from Takeda Pharmaceutical .

Emerging markets fund manager Ashmore posted a 49% hike in annual pre-tax profit as assets under management jumped 19%.

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