Crisis-hit Northern Rock saw shares soar 10% today as reports suggested Olivant’s hopes of rescuing the beleaguered lender had been given a boost.
The bank gained 8p to 94p as it emerged that investment group Olivant had been given access to the firm’s banks and management, putting it on an equal footing with the rival Virgin consortium.
Northern Rock’s gains saw it head up the risers board, with the wider FTSE 100 Index up 7.5 points at 6371.7 by mid-morning.
A late rally on Wall Street put investors in better spirits today despite the London market’s heavy losses in the previous session.
The FTSE 100 Index sank 3% yesterday amid doubts over efforts by central banks to tackle the credit crunch, but a positive finish in US markets helped put London on the front foot.
Pest control-to-cleaning company Rentokil Initial also made a modest gain of 3.2p to 117.5p as investors returned to the stock after yesterday’s profits warning sent shares tumbling 22%.
Among the fallers, Halifax Bank of Scotland was still out of favour after its Thursday update signalled weaker retail profits, despite expectations of in-line results. Shares were off 23p at 741.5p.
British Gas owner Centrica meanwhile was up 3.25p at 367.5p, despite flagging up “more challenging” market conditions in a trading update. The group said it still expects business in the second half to be profitable even with wholesale gas price rises putting margins under pressure.
In the FTSE 250, Northern Foods, the maker of Goodfella’s frozen pizzas, rose 7%, or 5.75p to 89.25p after the group said it had seen steady progress across the business and plans to buy back 5% of its shares.
United Business Media was also one of the second tier’s top gainers, up 18.5p at 598p after the publisher gave an upbeat account of year-end trading, with November its most profitable month of trading in five years.