Whitbread’s ambitious plans to expand its Costa coffee brand in Eastern Europe have suffered a blow as the operator of its franchised shops in Poland has gone into administration.

Whitbread is hoping that someone will buy the 16-strong store franchise but if that does not happen it will have to rebuild the brand from scratch with a new franchisee. It had hopes to build 100 stores there by 2011 and 200 stores in Russia.

Whitbread lost 44p to £10.89. Its Costa chain has become one of its main growth engines but the problems in Poland indicate the difficulties of rapid expansion under franchise overseas. It may look at rival Coffee-heaven (see below).

The FTSE 100 lost 63.8 to 5,412.8, its lowest level of the year and just a fraction less than the 20 per cent fall from its October peak that would make it an official bear market.

The problem was TPG’s sudden decision to quit the rescue financing of Bradford & Bingley, down 11p to 50p, below its 55p rights price, which pushed the whole bank sector into a sell-off. Dresdner Kleinwort said the withdrawal was a sign that the rights price was too high and set a 50p target. Rival mortgage lender Alliance & Leicester fell 12 per cent or 36¼p to 255½p as it is likely to come under the same sort of pressure. Société Géné-rale cut its price target on A&L from 345p to 230p and gave warning that it would struggle in the price war for deposit accounts while its mortgage book would shrink and its commercial bad debt would soar.

Barclays, which is attempting to put together a £4.5 billion funding package from sovereign wealth funds, lost 4½p to 279p. HBOS fell 7¾p to 271½p, below its 275p rights price.

Dismal passenger number figures from British Airways late on Thursday weighed on the travel sector. BA lost 12p to 197p, while Tui Travel fell 10p to 178p and Thomas Cook lost 8½p to 205p.

ITV rose 1.5p to 42.6p as shorters closed positions for the weekend, even though ABN Amro cut from “hold” to “sell” and its price target from 75p to 35p. It believes the dividend will have to be cut and that it will breach bank covenants if the economy goes into recession.

Marks & Spencer fell 9p to 227p after its joint house broker Citigroup cut from “buy” to “sell” and reduced its profit forecast by 20 per cent this year and 30 per cent next. This hit J Sainsbury, which is also losing market share, and it fell ¼p to 279¾p even though Qatar increased its stake to 26 per cent. Qatar is free to launch a fresh bid at any price.

Friends Provident fell 7p to 94½p on reports that the only trade buyer for its Lombard wealth management division, Swiss Life, had pulled out.

Enterprise Inns fell 8¾p to 358½p after Goldman Sachs cut its price target to 300p saying second half trading would disappoint.

Trinity Mirror, exposed to a retail ad slowdown, lost another 2½p to 91½p as UBS halved its price target to 70p.

Wellstream Holdings, the oil pipelines business, fell 30p to £12.93 on fears that a new competitor, Prysmian, was taking share from its key client Petrobras, the Brazilian oil group. Oriel Securities said Petrobras had formed a relationship with Prysmian but has yet to agree a major contract.

— Wall Street was closed for Independence Day celebrations.

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