Morning Markets: FTSE defies Wall Street losses with modest gains

London’s leading blue chip index gained slightly in early trading despite heavy losses from US technology stocks overnight.

At 8.30 GMT, the FTSE 100 was up 0.84%, or 43 points, to 5,188. Barclays and Lloyds are among the morning's high performers, up 2.76% and 1.77% respectively. International Power is up 2.36%

But banking stocks are expected to feel the pinch after Standard & Poor's downgraded Britain's banking system and President Obama proposed radical reforms to the industry at the World Economic Forum in Davos.

Tory leader David Cameron said he would stand shoulder-to-shoulder with the US President and drive through reforms to the banking system should his party win power.

Aerospace manufacturer BAE Systems is down 0.65% and Cadbury - on the back of its hostile takeover move by Kraft - is also down 0.42%.

Meanwhile, the Dow closed yesterday down 1.13%, or 115 points, to 10120, with banking giants JP Morgan Chase and Bank of America among the fallers. Technology companies led the downward plunge after Apple's new iPad was met with disappointment, with Qualcomm, Motorola, LSI Logic and Symantec all taking a bashing.