LONDON, Feb 16 (Reuters) - Britain's FTSE 100 .FTSE index is seen opening down as much as 1.3 percent on Monday, according to financial bookmakers, as persistent concerns over the banking sector hurt sentiment.
Britain's Lloyds Banking Group (LLOY.L) shock warning about problems at its recently bought HBOS arm has set alarm bells ringing about the gathering pace of corporate loan defaults. [ID:nLD840872]
Financial spreadbetters expected the UK benchmark to open down 48 to 55 points after it closed down 12.65 points, or 0.3 percent at 4,189.59 on Friday. But activity was expected to be light on Monday with the U.S. markets closed for a holiday.
Britain will fall into a deeper economic recession than previously thought, the Confederation of British Industry said, as tight credit conditions and a global downturn weigh down on companies. Property Web site Rightmove said asking prices for properties in England and Wales were a record 9.1 percent lower in February than last year at an average 216,163 pounds ($312,300), but prices were 1.2 percent up on the month.
European Central Bank Executive Board member Juergen Stark was quoted as saying that aggressive cuts in euro zone interest rates would exacerbate uncertainty given the ECB does not see any risk of deflation.
In Asia, Japan's economy shrank in the last quarter at its fastest rate since the first oil crisis in 1974, hit by an unprecedented slump in exports, and economists warned there was little sign of any improvement for now. Over the weekend, the Group of Seven industrial powers, fearing a 1930-style resurgence of protectionism, ended crisis talks in Rome with a pledge to do all they could to combat recession without distorting free trade.
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