HBOS shares went up in the first few hours of trading this morning after recording the biggest fall on the Stock Exchange yesterday.
They rose 55p to 149p as investors speculated that its takeover by Lloyds TSB will survive following the state bail-out.
But the FTSE 100 Index slid nearly 5% today after the Government's £50 billion bank rescue plan failed to halt the London mark
et's recent slide.
Traders were focused on global worries after New York's Dow Jones Industrial Average fell 5% and Asian markets followed suit.
Yesterday shares in HBOS plunged 42 per cent.
Prices in the company, which is looking to be taken over by Lloyds TSB, dropped 66.8p to 94p. Lloyds shares meanwhile slumped 33.5p to 225.5p.
Concerns over the takeover were expected to be raised by Halifax MP Linda Riordan with Prime Minister Gordon Brown today.
Mr Brown is due to announce a major rescue package for the stricken UK's banking system.
The plan, reported to involve up to £50 billion of taxpayers' money, is expected to include a cash injection for the banks to bolster their depleted balance sheets.
In return the taxpayer will own a stake in the banks.
It is also expected to include access to a stand-by facility for the banks to ensure they have sufficient funds for day to day operations.
Meanwhile troubled HBOS - parent company of the Halifax - yesterday agreed to sell its Australian banking interests for £1.2 billion in a bid to boost its balance sheet.
The bank said the sale of Bank of Western Australia Ltd and St Andrew's Australia Pty Ltd would "further enhance the group's capital position and reduce the group's wholesale funding requirements."
The retail, business banking, insurance and wealth management businesses will be sold to Commonwealth Bank of Australia subject to approval by Australian regulators.
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