FTSE falls early on weak oils and HBOS; miners rise

Britain's top share index fell early on Monday, giving up some of the previous session's sharp gains, after a disappointing take-up of HBOS's rights issue and as oil shares weighed with crude trading well off record highs.
By 0724 GMT, the FTSE 100 was down 32.9 points, or 0.6%, at 5,343.5, after closing up 1.7% on Friday, marking its first weekly increase in nine weeks and the end of the longest losing stretch since late May 2002.
"There is a realisation that people behaving like ostriches are going to have to take their heads out of the sand. We've got an issue here — it is called falling growth and is called heading towards recession…That's the sentiment play," said David Buik, strategist at BGC Partners.
"The HBOS thing is … tragic and very unlucky. You cannot have a two-month gap before announcing the rights and implementing it, especially when the market is very, very brittle and extremely volatile."
HBOS fell 3.2% after the mortgage lender said shareholders subscribed to buy just 8.3% of shares in its 4 bln pound ($8 bln) rights issue, leaving its underwriters to try to sell almost 3.8 bln pounds of shares.
HSBC, however, advanced 0.8% after the Sunday Telegraph said the global banking group had held talks with China's sovereign wealth fund over a potential investment in HSBC.
Within the banking sector, Barclays, Lloyds TSB and Standard Chartered shed 0.4 to 1.3%.
The British economy is heading into recession and interest rates should fall to "well below" their current 5%, Bank of England policymaker David Blanchflower was quoted as saying in a newspaper interview.
A survey by property website Rightmove showed asking prices for homes in England and Wales fell two% year-on-year in July, the first annual fall since the series began six years ago.
Retailers and property stocks were down, with Marks & Spencer, Land Securities, British Land, Next, Sainsbury, Tesco and Kingfisher dropping 1.7 to 3.7%.
Investors will shift their attention to results from Bank of America, Apple and Merck & Co later in the day for further market direction.
Oil shares slipped after crude prices traded well off their record highs. BP, Royal Dutch Shell, gas producer BG Group and Cairn Energy lost 0.2 to 1.2%.
Miners tracked higher metal prices, with BHP Billiton, Rio Tinto, Anglo American, Xstrata, Vedanta Resources, Eurasian Natural Resources, Lonmin and Antofagasta adding between 0.5 and 2.6%.