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According to Reuters, the index was 1.7 per cent lower at 09:31 GMT, taking it to 5,276.12 points.
Drops of up to 3.5 per cent were recorded by Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays, with investor sentiment weakening on the news that two of Dubai's largest firms are seeking to delay debt repayments.
In the mining sector, Anglo American, Lonmin, Kazakhmys and Fresnillo retreated by between 1.5 per cent and 2.9 per cent, while Rio Tinto and BHP Billiton lost 2.8 per cent and 1.4 per cent respectively.
However, water firms brought some positive news to the market, as Severn Trent added 5.2 per cent and United Utilities rose by 2.5 per cent.
The companies revealed positive financial news this week, with both posting profit increases for the first six months of the financial year.
Posted by Clive Arneil
