RBS slumped 5.3% in a session when attention returned to the US economy and the backlog of data due for release following the recent government shutdown.
The highlight will be non-farm payroll figures today, although with investors now hopeful that the recent budget disruption will delay the tapering of quantitative easing the FTSE-100 Index climbed 31.6 points to 6654.2.
The pound edged back slightly against the dollar to 1.61, but was broadly flat on the euro at 1.18.
Outsourcing firm G4S was among the steepest climbers in the top flight on speculation that private equity firm Charterhouse has been looking to finance a bid for the beleaguered company's cash solutions business, which manages ATM machines as well as transporting cash.
The possibility of a £1 billion offer provided some spark for the company's struggling share price, which climbed 3.5% or 8.5p to 250.5p.
Defensive stocks dominated the rest of the risers board in a reflection of the anxiety still felt by traders following this month's US budget crisis.
Those on the front foot included consumer packaging company Rexam, which rose 11.7p to 504p, while information provider Reed Elsevier added 11p to 864.5p and Rolls-Royce climbed 31p to 1123p.
RBS shares were 19.6p lower to 353.1p after broker Nomura said it was looking more likely that the Government's ongoing review into a potential good bank, bad bank split will result in significant change.
Arguing that shareholders have "much to lose" from an unfavourable outcome of the review, Nomura maintained its reduce rating on the stock.
Sentiment in the sector was also hurt by reports JPMorgan Chase has reached an £8 billion deal with US authorities to settle a series of civil probes over sales of mortgage-backed bonds in the run-up to the financial crisis. Barclays fell 3.1p to 274.8p.
Marks & Spencer shares were under pressure after it emerged that Gillian Ridley Whittle, development and buying director for womenswear, is to leave to join Australian department store group Target.
Her exit will heap more pressure on the chain as investors brace for its ninth consecutive quarter of falling general merchandise sales. Shares were 8p lower at 487.1p
Outside the top flight, shares in defence equipment firm Qinetiq rose 4.6% or 8.9p to 202.8p on speculation that its American services business is up for sale.
Other big risers on the FTSE-100 were Amec up 44p to 1148p, Vedanta Resources 32p higher to 1071p and Babcock International 35p firmer to 1242p. Other big fallers on the FTSE-100 were GKN 8.2p lower to 362.5pand Kingfisher 7.7p down to 377.5p.