FTSE continues to fluctuate

Investors remained on edge today as the FTSE 100 Index continued to fluctuate after its worst session in more than four years yesterday.

Caution over credit markets and US sub-prime mortgage defaults meant the Footsie swung between positive and negative territory.

It reached mid-morning 9.3 points higher at 6260.5, but the session saw the top flight fall by as much as 58.9 points to 6192.3, before recovering to stand 64 points higher at 6315.2.

At one point the Footsie stood below its New Year opening price.

Further volatility could occur later in the session as investors await more economic news from the US later today, including GDP figures.

Bank stocks were being closely watched as analysts digested news that the competition watchdog had launched a court case to establish whether their unauthorised overdraft charges are unfair.

Heavyweights from the sector will report interim results next week, but in the meantime shares held steady. HSBC set the pace with a gain of 16p to 886p, while Lloyds TSB added 2.5p to 541p and Barclays gained 2p to 691p.

Alliance & Leicester was the exception, down 18p at 1013p, even though it posted results at the top end of City forecasts.

Meanwhile, the planned merger between closed life insurance specialist Resolution and life and pensions group Friends Provident saw both firms enjoy contrasting fortunes.

Resolution rose after it emerged last night that Pearl Assurance, a major shareholder, wanted a rethink on the deal as it believed Resolution could find other ways to boost shareholder value. That lifted Resolution by 16.5p to 648p, but the threat to the merger meant Friends Provident fell 1.3p to 180.1p.

Broadcaster BSkyB, meanwhile, saw shares dip amid the wider market concerns, despite reporting full year figures in line with management and market expectations, with a 10% rise in revenues for the year to June 30.

Shares were down 3p at 672.5p.