Beleaguered Northern Rock led the London market higher today amid fresh hopes of a bid for the company.
Northern gained more than 8% today as investors acted on the company’s hints of a possible offer, sending the shares 12.9p higher at 176p.
The wider FTSE 100 Index was 62.6 points ahead at 6459.6 by mid-morning after a better performance from heavily-weighted financials following broker upgrades.
Fellow mortgage lender Alliance & Leicester gained 17.5p to 726.5p on Northern’s news. Halifax Bank of Scotland was 26p ahead to 854.5p after analysts at Goldman Sachs said the firm was a likely winner from rising mortgage margins.
Other banks on the front foot included Lloyds TSB, 9p up to 540.5p, and Barclays, which gained 3.5p to 601.5p.
Elsewhere in the top flight, industrial conglomerate Smiths Group gained nearly 3% after announcing the departure of its long-serving chief executive Keith Butler-Wheelhouse.
Traders speculated that his successor could look at a break-up of the company, sending the shares 31p higher at 1094p.
But housebuilders lost some of their early advances made after Barratt Developments produced full-year figures.
Initial relief that the results were in line with expectations bumped the shares 25p higher, but Barratt failed to hold on as investors digested cautious outlook comments. Shares were later up 2p at 728p.
Sector peers Taylor Wimpey – up 0.75p to 256.25p, and Persimmon, up 15p to 908p - also eased back from larger gains earlier in the session.
With just a handful of stocks in negative territory the leading Footsie faller was Currys owner DSG International, which fell 6.8p to 128.1p on a downgrade from Credit Suisse and a 20% fall in first-half profits from FTSE 250 retailer Kesa Electricals.
Comet retailer Kesa was off nearly 5%, or 13.25p, at 263p.
Back in the top flight, oil major BP continued yesterday’s losses after chief executive Tony Hayward reportedly warned of a “dreadful” operational performance in the third quarter. BP was 2.5p down at 570p.