FTSE finishes rollercoaster day on high
London's blue chips finished in positive territory today after a see-saw day for the market.
Takeover speculation surrounding heavily-weighted mining stocks offset further losses for financial stocks as the FTSE 100 Index closed 42.6 points higher at 6313.3.
The Footsie began the day on the front foot but was down in the mid-session amid jitters over interest rate decisions from the Bank of England and European Central Bank.
With both banks holding rates, receding fears of future hikes and a positive opening on Wall Street helped buoy equities later in the session.
Miner Rio Tinto was the top performer, gaining more than 5% on talk that mining giants BHP Billiton and Brazil's CVRD may be setting their sights on the firm.
The speculation sent Rio 191p higher to 3716p, while rumoured suitor BHP Billiton climbed 56p to 1473p. In a good day for the sector, Lonmin advanced 152p to 3379p and Vedanta Resources gained 63p to 1910p.
Pubs chain Punch Taverns was 18p ahead at 1084p despite saying that full-year profits would be between 2% and 3% lower due to the wet summer. Shares were lifted by reports that the business may spin-off its managed Spirit division.
Meanwhile, a new oil discovery off the coast of Brazil also gave BG Group a lift, with the stock finishing 38p higher at 824.5p.
But it was a different story for another energy player as Drax - operator of the UK's biggest coal-fired power station - was the leading Footsie faller.
Drax's cautious outlook and a 14% decline in first-half pre-tax profits saw shares slide nearly 6%, or 38p, to 637.5p.
Stocks in the financial sector were also on the back foot after the Bank of England issued a surprise statement - its first alongside a decision to hold rates since May 1999.
The Bank's comments that it was too early to know the full effects of the recent financial turmoil on companies and households fed concerns over a sustained bout of market turbulence.
Mortgage bank Northern Rock led the sector's losses with a fall of 21p to 672p, while Alliance & Leicester dipped 14.5p to 996.5p.
Mortgage lenders have suffered in the current credit turmoil due to higher funding costs, while banks have seen steep rises in the costs of interbank lending.
Barclays was off 12.5p at 608p, while Royal Bank of Scotland fell 9p to 558p.
In the second tier, engineering group Amec surged nearly 5%, or 30.5p, to 685.5p, after the firm more than doubled underlying pre-tax profits and upgraded its full-year forecasts.
Music retailer HMV recovered earlier losses to close 0.25p higher at 130.25p as it revealed a 6% lift in sales.
The leading Footsie risers were Rio Tinto up 191p at 3716p, BG Group ahead 38p at 824.5p, Lonmin up 152p at 3379p and BHP Billiton ahead 56p at 1473p.
The biggest Footsie fallers were Drax Group down 38p at 637.5p, Northern Rock off 21p at 672p, Legal & General down 3.3p at 138p and Standard Chartered off 32p at 1485p.
