Sharply weaker banks dragged Britain's top shares lower on Wednesday as fears about Europe's debt came into sharp focus on rumours France may be in danger of losing its triple-A credit rating,and on concerns over the outlook for French banks - Essar Energy lead the losers. UK banks were left nursing their biggest one-day percentage fall since May 2009 as shares of their French peers took a hammering,with Societe Generale down 14.7 percent as market talk circulated about the bank. A Societe Generale spokeswoman denied the series of rumours related to its financial solidity. Concerns that France's AAA rating was at risk unnerved markets,although credit ratings firms Moody's Investors Service and Fitch reiterated their top tier ratings for the country,a day after Standard & Poor's did the same. There's chatter that France may be downgraded this evening which has obviously hit all the banks very hard. The French banks are really really poor but it's locked onto our banks as well,Joe Rundle,head of trading at ETX Capital,said. Barclays was the worst off among the UK banks,down 8.7 percent,reversing earlier gains inspired by a WestLB upgrade to buy and after Citigroup had named the lender as a most preferred stock on valuation grounds. Standard Life remained strong,up 5.7 percent and at the top of the blue-chip leader board,after the insurer unveiled a bigger-than-expected 44 percent jump in first-half profit,prompting Panmure Gordon to lift its rating to buy. Man Group advanced 3.2 percent,boosted by recent director share buying and after the hedge fund manager reported that the net asset value at its flagship AHL fund rose by 1.9 percent last week. Elsewhere among the gainers,Weir Group climbed 1.9 percent as Goldman Sachs upgraded the engineer to its Conviction Buy list,saying recent share price weakness offers a compelling entry point. Mining stocks came under pressure as copper prices fell,with risk appetite dented by the fears about France. Kazakhmys,was a top blue-chip faller,off 7.7 percent But as gold ,a traditional safe haven,hit fresh record highs on Wednesday,Randgold Resources advanced 4.3 percent. The UK benchmark index ended down 157.76 points,or 3.1 percent,at 5,007.16,its lowest close since July 6 2010,having risen 1.9 percent on Tuesday to snap a seven-session losing streak when it lost about 14 percent of its value. The index fell back on Wednesday after hitting an intra-session high of 5,262.72 boosted by bargain hunting and the U.S. Federal Reserve's promise to keep interest rates unchanged until at least 2013. It remains a very dangerous market. I'm starting to feel less negative though than I did at the start of last week,said Lex van Dam,hedge fund manager at Hampstead Capital,which has about $500 million of assets under management. I think it might be worth buying some recent underperformers but only while keeping a tight stop in place. This increased volatility normally means difficult times ahead of us. Essar Energy topped the fallers' list,off 12.6 percent,as Goldman Sachs downgraded the India-focused refiner and power generator from its Conviction Buy list. Company INFO More on Essar Energy Stocks More on Essar Energy
