FTSE slips 0.7% despite Wall Street surging to 10-week high

London's top stocks have given up some of yesterday's triple-digit gains in early trading, with the FTSE 100 down 0.72%.

Similar to other European indices, the FTSE was down 38.93 points to 5,358.18 just after opening.

The retreat follows the previous session's sharp banking-led rise, after HSBC kicked off the sector's reporting season with forecast-beating results. It drove the index to a near three-month high.

Schroders was an early riser this morning ahead of the release of its first half results on Thursday. Its non-voting shares were up 5p, or 0.45%, to £11.10 per share just after opening.

Over the weekend, Morgan Stanley reiterated its "overweight" stance on the blue chip fund manager, which it expects to demonstrate best-in-class growth among its coverage in the second quarter.

RBS is also performing well ahead of expected positive figures on Friday. The bank rose 0.5p, or 0.96%, to 52.6p per share, just after 8.30am.

US stocks closed at their highest level in 10 weeks on Monday after positive economic data from China and Japan, and strong bank earnings figures from Europe.

At close, the Dow Jones was ahead by 208.44 points, or 1.99%, at 10,674.38. Top gainers were Alcoa, Exxon Mobil, JP Morgan Chase, and Hewlett Packard.

Japanese shares closed higher on Tuesday, lifted by some strong company results last week, which offset a slowdown in Chinese manufacturing output.

The Nikkei 225 index rose 33 points, or 0.35%, to 9,570.31.