FTSE remains firm despite Northern Rock plummeting

Troubled bank Northern Rock endured another rollercoaster day on the London market today on the back of further sale speculation.

The beleaguered mortgage bank dived more than 11%, down 22.3p to 172p, having gained as much as 13% earlier in the session, amid receding hopes that a white knight will emerge to take control of the lender.

But the FTSE 100 Index remained firm, closing the session up 9.2 points at 6465.9 as heavily weighted miners gave their support to blue chip stocks.

A strong opening on Wall Street also helped boost London shares in a lacklustre day for corporate or economic news on this side of the Atlantic.

BHP Billiton was one of the strongest gainers, up 6%, or 94p, to 1750p on reports in Australia that the group has discovered the world’s largest gold resource.

Fellow miners were also buoyed by commodities prices and fresh reports of robust Chinese demand.

Xstrata rose 145p to 3289p, with Vedanta Resources not far behind, up 100p at 2235p, although Antofagasta topped the risers’ board with a lift of 52.5p at 843p.

Retailing giant Marks & Spencer also featured high up in the list of risers, adding 25p to 592p after a positive note from Deutsche Bank.

But Northern Rock headed the fallers board as JP Morgan brokers said a discounted sale was the most likely outcome for the firm, despite weekend reports that few buyers had expressed interest.

Fellow mortgage lender Alliance & Leicester was dragged down by its Newcastle counterpart, slipping 21p to 716p, while Barclays was off 17.5p at 616p.

Top flight debutants Taylor Wimpey experienced a poor start to its first day of trading on the FTSE 100 Index.

The promoted housebuilder took second place on the fallers board, off 16.75p at 271p

Exploration and production firm Tullow Oil and mobile and broadband group Carphone Warehouse – also entering the benchmark share index – fared little better, down 7p at 600p and 3.25p at 368p respectively.

Taylor Wimpey led a poor performance from the housebuilding sector as a whole.

Barratt Developments was also down, off 36.5p at 749.5p, while Persimmon fell 26.5p to 906.5p.

Heating and plumbing firm Wolseley dropped by 5%, or 41p to 807.5p after warning that the current credit crunch would add to the group’s problems in the US housing market.

In the FTSE 250, British home emergency cover provider Homeserve fell 54p to 1704p after analysts said profits could taper off, overshadowing a positive pre-close trading update.

Elsewhere fashion retailer Alexon, owner of Bay Trading and Envy brands, rose 4p to 213.25p after reporting better than expected interim results, despite revealing that sales were down on last year and had fallen further in early second half trading.

The biggest Footsie risers were Antofagasta up 52.5p at 843p, BHP Billiton ahead 94p at 1750p, Vedanta Resources up 100p at 2235p and Xstrata ahead 145p at 3289p.

The biggest Footsie fallers were Northern Rock off 22.3p at 172p, Taylor Wimpey down 16.75p at 271p, Wolseley off 41p at 807.5p and Barratt Developments down 36.5p at 749.5p.