THE London market fell into the red yesterday in the face of deepening concerns over a European debt crisis, with the banking sector bearing the brunt of the pressure.

The FTSE 100 Index closed nine points lower at 5569.

Banking stocks were among the major FTSE losers, with HSBC down 10.5p at 649p, Lloyds off 1p at 74.3p and Barclays slipping 3.8p to 305.2p.

The biggest faller, however, was Vedanta Resources.

Shares dropped four per cent, or 96p to 2165p, after it was ordered to close one of its key smelting plants in India.

On the plus side, BP surged four per cent, up 16.7p to 421.9p, after incoming chief executive Bob Dudley announced measures aimed at rebuilding the shaken company.

BP’s competitors failed to follow suit, with Royal Dutch Shell down 3.5p at 1910.5p, Tullow Oil holding at 1283 and Cairn Energy slipping 2p to 458.1p.

Airport scanners and medical devices firm Smiths Group reported a 17 per cent rise in annual profits to £435m, but stocks were down 18p to 1196p.

Rolls surged ahead three per cent, or 20.5p to 612p, after Morgan Stanley upgraded the stock. Other firms on the front foot included Smith and Nephew, which climbed 9p to 573.5p, while industrial testing firm Intertek added 16p to 1836p.

Dairy Crest put back recent falls to rise 23.6p to 372.6p in the FTSE 250 Index after it announced it has renewed a contract to supply the supermarket Morrisons with fresh milk through to 2015.

Transport provider FirstGroup added 17.7p to 367.3p after reporting signs of more stable trading in its North American school bus arm. The Aberdeenbased group said demand for first-class train travel is recovering to levels not seen since the recession struck.