A FRESH downgrade to Greece’s credit rating and a hefty compensation bill for the banking industry troubled traders yesterday as the London market closed in the red.

The FTSE 100 Index was 34 points lower at 5942.69 after Standard and Poor’s cut (S&P) Greece’s rating further into junk status, amid expectations that European officials will revamp the country’s bail-out package.

HSBC, which has put aside $440m (£269m to cover claims, saw shares fall 3.5p to 648.2p, as it also revealed lower-than-expected profits in its first quarter trading update.

Royal Bank of Scotland, which is yet to reveal the expected financial hit from PPI repayments, was down more than two per cent, or 1p at 41.7p. Barclays which expects claims to cost £1bn, was off 3.7p at 273.9p.

Miners and energy firms featured strongly on the risers board after last Friday’s better-than-expected US unemployment figures boosted prospects for global demand.

Crude oil prices were on the up again, with Brent crude three per cent higher at $113.2 a barrel. Metal prices, such as gold and silver, were also higher.

Miners Kazakhmys and Lonmin advanced 8p to 1283p, and 13p to 1562p, respectively, while oil and gas firm Petrofac gained 12p to 1471p.

Centrica posted the biggest fall on the blue chip index after the British Gas owner said earnings will grow at a more modest rate than expected.

The company blamed the disappointment on higher taxation on its upstream profits and a squeeze on margins in its household supply business caused by rising wholesale gas costs.

Centrica shares dropped 12p to 303.5p.

Shares in Thomson owner TUI Travel were down two per cent after rival Thomas Cook forecast a fall in its full-year operating profits.

TUI, which is due to update the market today, fell 1.2p to 243.6p, while FTSE 250 rival Thomas Cook saw a drop of 4.9p to 165.7p, after warning it will take a further £35m hit due to the uprisings in the Middle East.

Rank Group was high on the FTSE 250 Index risers board – up 2.8p to 151.6p – after a Malaysian investment fund increased its stake in the Mecca bingo firm to 40 per cent, triggering a mandatory offer for the rest of the company’s shares.