LONDON (AFP) – The FTSE 100 slumped Friday as investors were spooked by President Barack Obama's promises to impose regulations on the US banking and financial sectors.

London's benchmark FTSE 100 index dropped 0.60 percent to 5,302.99 points.

Lloyds Banking Group was the most traded stock, with 375 million units changing hands, followed by Royal Bank of Scotland, which saw 208 million shares switch owners.

ICAP was the big loser of the session, shedding 6.58 percent -- or 28 pence -- to end at 397.7, followed by the London Stock Exchange, which lost 4.32 percent -- or 30 pence -- to close at 664.5 pence.

On the upside, Xstrata posted the day's top gains, adding 2.37 percent -- or 26 pence -- to end at 1125. Eurasian also rose, adding 1.7 percent -- or 16 pence -- to end at 954.5.

At 17:00 the pound was trading at 1.6127 against the dollar and 1.1388 against the euro.