Banks extend decline, Barclays down 4.8
FTSE 100 down 1, FTSE 250 off 1.4

March 20 Reuters London stocks fell 1 on Monday, as banks stretched declines after Swiss lender UBS39;s weekend deal to rescue rival Credit Suisse failed to stem fears of a global banking meltdown.

The bluechip FTSE 100 fell 1, hitting its lowest in more than four months.

Banks slumped 3.2, extending declines from last week, when they posted their worst weekly performance in more than a year. HSBC and Standard Chartered were among the top losers, shedding 3.2 and 4.3, respectively.

UBS on Sunday agreeing to buy Credit Suisse for 3.23 billion and actions taken by top central banks to bolster the flow of cash around the world failed to lift investor sentiment.

The scale of the response from central banks at the weekend acknowledges gaps in the system, which will leave many investors unwilling to revisit financial stocks until such time as the full extent of the problem is known, said Richard Hunter, head of markets at interactive investor.

UK39;s oil and gas index dropped 1.8, tracking a decline of more than 2 in oil prices.

Precious metal miners jumped 5.3, tracking strength in gold prices as investors fled to the safehaven metal. GOLL

The FTSE 100 has reversed its yeartodate gains, falling more than 2, as fears of a meltdown in the global banking sector gripped investor sentiment.

The more domestically focussed FTSE 250 midcap index shed 1.4 on Monday.

Along with the U.S. Federal…