Fresh European sanctions against Russia weighed on markets in a session when the pound and banking stocks recovered some poise.

Lloyds Banking Group and Royal Bank of Scotland were 0.9p higher to 74.1p and 3.8p to 346p respectively after telling investors their plans in the event of a Scottish 'Yes' vote would see a transfer of operations south of the border.

But this failed to calm the wider London market as the FTSE 100 Index fell 30.5 points to 6,799.6, on a day which also saw the EU impose further sanctions on Russia over the Ukraine crisis.

However, the pound was firmer, at just above 1.62 versus the US dollar, after a new opinion poll showed slightly stronger support for the No camp. Sterling was also slightly higher against the euro, at 1.25.

In a busy session for retail results, supermarket Morrisons rose 1.2p to 177.8p despite reporting a 51 per cent drop in half-year profits to £181 million.

The Yorkshire-based company's beleaguered share price has shown signs of recovery recently amid industry data indicating that it may have turned a corner on sales.

Morrisons insisted there was a long way to go in its three-year revival plan - particularly with conditions remaining so challenging - but expressed its confidence by raising its half-year dividend by five per cent.

Elsewhere, Next shares gave up recent gains after it reported a 19 per cent rise in half-year profits to £324.2 million and said the last six months had been its strongest in many years.

Shares in the fashion chain paused for breath after a recent strong run to stand three per cent, or 215p lower at 6,950p.

Argos owner Home Retail Group fell more than seven per cent, or 13.6p to 174p, after the catalogue chain disappointed the City with like-for-like sales growth of only 1.2 per cent for the 13 weeks to August 30, compared with expectations of 3.4 per cent.

The update also dashed City hopes that Homebase is about to be sold to US buyout funds after chief executive John Walden said there was no sale process under way. Homebase sales were 0.1% higher in the period.

Shares in homewares chain Dunelm were 6.5p higher at 857p after it announced the shock return of Will Adderley as chief executive at the firm set up by his parents.

He replaces former Halfords director Nick Wharton who has held the role for four years and announced a seven per cent rise in full-year profits to £116 million.

The biggest risers on the FTSE 100 were SSE , which was up 40p at 1,485p, ITV up 4.4p at 216.8p, Standard Life up 6p at 413.5p and Lloyds Banking Group up 0.9p at 74.1p

The biggest fallers on the FTSE 100 were Tullow Oil, which went down 22.5p to finish at 697.5p, Next down 215p at 6,950p, Fresnillo down 23p at 819p and Hargreaves Landsdown ended down 18p at 1,004p.