Britain's leading share index lost 0.6 percent in early trade on Tuesday, tracking sharp falls overnight in Asia and the United States as anxiety about the costs of rescuing the financial sector returned to the fore. By 0900 GMT, the FTSE 100 index .FTSE was 21.00 points lower at 3,829.73 after ending down 38.33 points at 3,850.73 the previous session. The index closed below the 4,000 mark for the first time in three months on Friday. "The FTSE is holding up pretty well so far but it is really just catching its breath following the multi-year lows from global markets overnight," said Howard Wheeldon, senior strategist at BGC Partners. Weakness in heavyweight energy stocks was again the main drag on blue chip sentiment as crude prices fell back towards $38 a barrel on growing economic worries. BP (BP.L), BG Group (BG.L), Royal Dutch Shell (RDSa.L), Cairn Energy (CNE.L), and Tullow Oil (TLW.L) lost between 0.6 and 2.0 percent. Mining issues suffered as well, with metal prices under pressure by demand concerns, with Rio Tinto (RIO.L), BHP Billiton (BLT.L), Xstrata (XTA.L), and Antofagasta (ANTO.L) down between 2.1 and 3.3 percent. Wall Street slumped to a 12-year low on Monday and Japan's Nikkei .N225 flirted with a 26-year low overnight as investors lost faith that the U.S. government will be able to stabilise the financial system. The United States vowed to prop up ailing banks if needed, with the government set to take a bigger stake in Citigroup and inject yet more cash into insurer AIG, even as Federal Reserve official urged that such interventions should be short term. Although Wall Street dropped overnight, U.S. banks rallied on the government moves and banks were mixed in London. Barclays (BARC.L), Standard Chartered (STAN.L), and HSBC (HSBA.L) reversed opening gains, falling between 0.4 and 2 percent.

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