The FTSE 100 share index was heading for its fifth daily fall in a row by midday on Friday, as Europe's debt crisis showed no sign of abating and companies said they were beginning to feel the effects of the government's austerity measures.
In light volumes, London's blue chip index <.FTSE> was down 40.96 points, or 0.8 percent at 5,382.18 by 11:56 a.m., and is on track for a weekly fall of more than 3 percent as global debt problems continue to stifle corporate growth.
The firm said it would only deliver reasonable 2011 revenue growth, prompting Oriel Securities to repeat a reduce rating.
Capita offers no surprise by confirming our view that downward pressure on revenue is more severe than they guided at the interims, Oriel said in a note.
Military equipment maker and FTSE mid-cap index <.FTMC> constituent Chemring
The statement prompted broker FinnCap to cut its forecasts accordingly.
Meanwhile small-cap index <.FTSC> member Huntsworth
The banking sector continued to suffer from the uncertainty over where the European debt crisis is heading, falling 1.0 percent.
Rhetoric from politicians about tackling the crisis has been strong over the past few weeks but action has been scarce, which drew a rebuke from new European Central Bank President Mario Draghi.
Draghi expressed his exasperation at the slow progress made by euro zone governments in getting their European Financial Stability Facility rescue fund up and running, as Italy and Greece face the real prospect of bankruptcy.
Italian, Greek and Spanish bond yields remained unsustainably high long term, as investors fear default and potentially the end of the euro.
Louise Cooper, markets analyst at BGC Partners, said worryingly the entire debt issued from all 17 euro zone countries rose almost 40 percent to 7.8 trillion euro between 2006 and 2010 and the euro zone is running out of willing lenders, with banks desperate to cut exposure.
(The charts) are saying that the crisis is worsening by the day, that Merkel and Sarko and all the other players are running out of time. This slow-motion car crash is getting close to impact.
Defensives featured on the upside, such as SSE
Deutsche Bank urged investors to keep faith with the UK water sector in search of better returns and defensive qualities as corporate earnings come under intense pressure.
In today's low real bond yield, high inflation environment we see returns offered by the UK water sector, and its defensive characteristics as attractive, Deutsche Bank said.
Deutsche Bank upgraded FTSE 250 water firm Pennon
Although swinging wildly, the FTSE was off its lows at midday, with U.S. stock index futures pointing to a slightly higher open for equities on Wall Street on Friday.
U.S. data this afternoon includes October lead indicators, due at 1500 GMT.
(Editing by Greg Mahlich)