BARCLAYS slumped on the London market yesterday amid speculation of a multi-billion pound share sale to appease regulators over its financial strength.

The bank closed down 3.5 per cent, dragging down other lenders and holding back gains on the FTSE 100 Index.

The top tier was up only 5.5 points at 6560.3 ahead of Barclays’ announcement today on how it will plug a hole in its balance sheet.

Its shares were down 11.1p to 309.05p.

A downbeat session for banks also saw Royal Bank of Scotland retreat 2.4p to 325.6p, HSBC dip 2.8p to 728.4p and Standard Chartered fall 16.5p to 1485.5p.

Miners benefited from the solid economic sentiment to top the FTSE 100 leaderboard, with Randgold Resources rising 176p to 4839p and Fresnillo advancing 25p to 1051p.

In other corporate news, news of an advertising mega-merger failed to provide a lasting boost to Sir Martin Sorrell’s WPP.

Analyst speculated the merger of Omnicom and Publicis, which will bring together agencies including Britain’s Saatchi & Saatchi and BBDO, could allow others to pick up major accounts as firms choose to quit the new company over potential conflicts.

But after initially soaring almost five per cent, shares in the advertising group closed up just 7p or 0.6 per cent at 1182p.

Nurofen and Strepsils firm Reckitt Benckiser fell 38p to 4588p, despite raising its full-year sales forecasts to the upper end of its previous five to six per cent growth guidance.

The guidance came as it said rapid growth across South East Asia and Latin America had lifted overall like-for-like sales in the first six months of the year by six per cent to £4.6bn.

Adjusted operating profit increased three per cent to £1,163m.