LONDON (ShareCast) - Footsie fell back late in the afternoon as US markets opened lower amid fears that a severe US recession is on the cards.

Dow Jones shed over 100 points in early dealing, overshadowing a good day for the weakest of the UK banks and miners and oil stocks.

US bank Citicorp upgraded UK banks to “neutral” from “underweight” but fellow US bank Goldman Sachs cut its price targets for some of the sector’s big names.

Barclays has been cut from 390p to 250p, Lloyds’ price target has been slashed from 270p to 170p, Royal Bank of Scotland’s price target has been virtually halved from 240p to 140p while HBOS’s price is projected at 140p versus a previous valuation of 220p.

Société Générale is another not sold on the prospects for British banks and has maintained an “underweight” rating on the sector. The downbeat views have not stopped investors from propelling HBOS to the top of the Footsie leaderboard, while RBS is another strong gainer.

Barclays is a faller, however, on reports it is talking to existing investors about raising £3bn through a preference share issue.

Resource stocks got a boost from the co-ordinated rate cut unveiled yesterday. Cairn Energy, ENRC, Antofagasta and Tullow Oil are back in favour, while miner Anglo American thrived despite Morgan Stanley dramatically cuttings its price target for the stock from 4250p to 2250p.

Oil and gas giant BG Group has concluded an agreement with Kazakhstan’s national oil and gas company KazMunayGas (KMG) to analyse and develop the central Asian country’s natural gas market.

Production for the nine months ended 30 September met expectations at Fresnillo and the Mexican silver miner and recent Footsie entrant is confident of hitting its 2008 production target.

Supermarket J Sainsbury bounces back strongly from the hammering it received yesterday. Dutch financial services company ING has upgraded the supermarket chain from “sell” to “hold” in the belief that the sale of Robert Tchenguiz's 10% stake will prove beneficial to the stock price performance.

Oilfield services company Wood Group said its trading performance for the year to date has been strong and it expects growth to continue.

Insurer Aviva said is capital position remains strong in the face of the recent market turmoil, adding that it has protected itself against further falls in the equity markets through increased hedges. Sector peer Legal & General also racks up a double-digit percentage gain but not so Standard Life, which remains the biggest Footsie faller.

Shares in fund manager Henderson Group stumbled again on a warning it will miss its £90m profit forecast for this year.

Full year profits at newsagent WH Smith were pretty much in line with expectations, rising 15% before tax and exceptional items to £76m, although like for like sales fell 2%.

Construction and support services firm Carillion is also going well as it continues to expect strong progress in 2008 and to deliver materially enhanced earnings in 2009.

Greggs has trimmed earlier losses but is still one of the big fallers among FTSE 250 stocks. The bakery chain cut its full-year operating profit forecasts by some £3m following a period of slower sales growth and higher costs.

Communications technology group Spirent has traded as predicted during its third quarter. In a short statement, the firm, which tests phone and broadband connections, said: “Trading for the period since 29 June 2008 is in line with the board's expectations”.

Recruitment firm Hays said the 10% net fee growth, 4% on a like-for-like basis, for the quarter to September represents a solid start to the year despite the increasing difficult economic environment.

Weir advanced after the engineer said it expects profits from continuing operations before intangibles to be slightly ahead of guidance thanks to foreign exchange benefits. Stockbroker Numis Securities has raised its rating on the stock following the update, from “add” to “buy”.

FTSE 100 - Risers
HBOS (HBOS) 153.50p +31.20%
Cairn Energy (CNE) 1,609.00p +18.22%
Eurasian Natural Resources (ENRC) 521.00p +15.78%
Antofagasta (ANTO) 332.00p +10.12%
John Wood Group (WG.) 277.75p +10.11%

FTSE 100 - Fallers
Barclays (BARC) 241.75p -13.12%
National Grid (NG.) 610.00p -8.27%
United Utilities Group (UU.) 577.00p -7.53%
International Power (IPR) 273.00p -6.91%
Unilever (ULVR) 1,369.00p -6.87%

FTSE 250 - Risers
Heritage Oil (HOIL) 162.75p +17.72%
Baring Emerging Europe (BEE) 515.00p +13.44%
Aricom (ORE) 16.25p +10.17%
Kesa Electricals (KESA) 107.75p +8.84%
Intertek Group (ITRK) 726.50p +8.76%

FTSE 250 - Fallers
Henderson Group (HGI) 74.75p -18.31%
Johnston Press (JPR) 34.75p -12.58%
Yell Group (YELL) 96.75p -11.85%
Bellway (BWY) 484.50p -10.28%
JKX Oil & Gas (JKX) 163.00p -9.57%

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