South African financial services group Old Mutual continued to see share price slide following news that HSBC had decided not to pursue Nedbank.

HSBC had entered into discussions to acquire Old Mutual's stake in the bank during the summer, but today walked away from the deal.

Share price dropped 4.8 per cent to 138.3p after Old Mutual was forced to announce to the market that no reason had been given for HSBC's decision.

In a statement to the market, it said, 'The reasons for HSBC's withdrawal were not disclosed to Old Mutual, but were not, as far as Old Mutual is aware, related to any adverse findings during HSBC's due diligence.'

The group said it would look at other options for its holding in Nedbank.

Insurance groups Standard Life and RSA Insurance were also both down at the close of trading, dropping 3.2 per cent to 227p and 131.8p, respectively.

The biggest riser was BT Group, which saw share price increase by 2.9 percent to 147.4p after coming to an agreement with UK government cabinet minister Francis Maude.

Talks had focused on delivering efficiencies to the government and comes ahead of next week's spending review.

Jeff Kelly, chief executive of BT Global Services, said, 'This agreement means BT will continue to play a central role in the transformation of public services which make a real difference to the lives of people in the UK every day.

'Having found efficiencies in our own business, we have considerable experience which can help the Government meet its efficiency objectives.'

Banks also rose strongly. Royal Bank of Scotland Group saw a 2.4 per cent rise to 46.4p, while Barclays increased by 1.8 per cent to 285p. Precious metals specialist Johnson Matthey saw a 1.8 per cent rise in share price to 1,928p.