Yesterday's sell off over fears of banking write downs continued in London for a second day, with Barclays feeling the brunt on fears it may have to take a write-down on its Barclays Capital arm.

There were also rumours that it might have gone to the Bank of England for an emergency loan and its shares were down nearly 6 per cent by 11am at a two year low of 538.5p.

All the banks were falling, with Royal Bank of Scotland off nearly 5 per cent at 475p, Loyds TSB off 2.6 per cent at 517p and HBOS down 2.6 per cent at 822.5p. Goldman Sachs said in a note this morning that Lloyds TSB was the most vulnerable since it was subject to the same pressures as the other banks but its earnings had not yet been downgraded by the market, nor have its shares fallen so far. HBOS remained its favoured stock.

Of the gainers, Tullow Oil stood out, up 2 per cent at 638.5p a new high, buoyed by the soaring price of crude oil.

BG Group which reported strong results yesterday, particularly from its Liquid Natural Gas arm was up another 7p at 888p and BP lifted 4p to 622.5p.

BSkyB was off 4 per cent at 662p on profit taking after third quarter results showed strong revenue growth but falling operating profit as the costs of broadband hit home.

The top FTSE-250 performer was Wellstream Holdings, maker of flexible drilling pipes for oil companies. It added another 4 per cent to a new high of 959.5p after Credit Suisse raised its target price to £11 on the basis that the company's Brazil factory had expanded its capacity and that rival Technip had recently said it was fully booked for 2008.

Favoured oil company bid targets Cairn Energy and Burren Energy were both up just over 2 per cent at £24.46 and 294.5p respectively.

New Star Asset Management lost 4.3 per cent at 315p as Citigroup placed 4.3 million shares at a discount of 309p. Since the company's caution last month over profit growth in the second half, there have been fears over the value of its property portfolio.

Gold Oil and Minmet ended a deal to explore for oil in Cuba and Latin America to allow Minmet to pursue opportunities in the US, which bans investment in Cuba.

Gold Oil returned from suspension on the news and gained 15 per cent to 7.3p. Minent was down 0.9p at 8.6p. As a result of the end of the deal, Gold Oil will sell its 8.3 million Minmet shares and Minmet its 23 million Gold Oil shares.

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