After yesterday's volatility, trading on the London stock exchange is a bit calmer this morning.
The FTSE 100 was up 19 points shortly after the open at 6400.9, a healthy 0.3% higher.
Rio Tinto and BHP Billiton are leading the way, up 3.46% and 3.55% respectively.
Northern Rock is the biggest faller, down 2% at 147p, despite evidence that it has cut its emergency government loan by £500m.
David Buik of Cantor Index expects that "things will be a little brighter today". We'll see....
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10.30am update
It's been the miners and little else this morning so far. Rio Tinto rose another 9% after BHP Billiton's bid, while BHP itself recovered 71p to £17.27.
Royal Bank of Scotland and Barclays, hard hit by credit fears yesterday, were volatile again. Early gains thanks to a better than expected performance by the US banks overnight soon petered out.
Traders said there were concerns one or both might have to reveal more sub-prime related losses, and there was talk RBS might need a rights issue in the wake of its consortium winning the bid for Dutch rival ABN Amro. If that happened the shares would tank even further, said traders. As it was RBS fell another 1.6% while Barclays slipped 0.5p to 485.75p.
Still, so far the FTSE 100 has remained in positive territory, up 38.6 points to 6420.5.
Elsewhere there is an intriguing situation developing at leisure group Rank. A tale went around a few days ago that William Hill or Ladbroke was building a stake. Today Credit Suisse declared it held the voting rights to 4.98% of Rank, prompting talk that this stake could be in the form of CFDs held on behalf of someone else, i.e William Hill or Ladbroke. Rank rose 4.75p to 88.5p.
A couple of analysts notes caught the eye. Exane BNP Paribas cut Rentokil Initial from outperform to neutral, leaving its shares 3.5p lower at 162.1p. But gases group BG was wanted, up 43p to £10.32 as Deutsche Bank raised its price target from 925p to £10.90.
Midday
Barclays is now really under the cosh, down around 7% on worries there may be some real nasties in the woodwork, with figures of £10bn being bandied around. The bank is due to issue an update on trading on 27 November, and seemingly has no plans to say anything before that.
Martin Slaney of GFT Global Markets summed it up: "There is some talk doing the rounds that Barclays have suffered big losses in the credit market crisis, with figures of £10 billion worth of write-downs being whispered. If that were true we could expect at least 15% of Barclays' value to be wiped off.
"The rumour comes on a day when US stocks are already indicated to suffer major falls as renewed dollar weakness maintains pressure on equities. An already nervous market is on red alert for any mention of credit losses and this rumour has proved particularly unnerving at the end of a very difficult and volatile trading week."
With Royal Bank of Scotland down nearly 6%, the early buoyancy in the market is long gone. The FTSE 100 index is now 84.1 points lower at 6297.8, and would be worse if not for Rio's continuing rise.
Another big faller is insurer Friends Provident, jilted after its proposed partner Resolution attracted the attentions of Pearl and Standard Life. The company has recently told bondholders it will redeem £289m convertible bond due on 11 December this year by issuing up to 169m new shares. At the same time UBS has put out a note cutting its price target to 175p "so as to reflect the short-
term uncertainties faced by Friends."
2.30pm update
Well it wasn't an official stock exchange announcement but Barclays has denied the rumours running around the market this morning.
A spokesman said there were three specific rumours - to whit, it planned a £10bn write-down, directors John Varley and Bob Diamond were resigning, and it needed an emergency rights issue. He said: "There is no substance to any of them."
He repeated that Barclays planned to issue a trading update on November 27.
But the worries led to such frantic trading Barclays' shares were actually suspended for a few minutes, and the exchange's auction process kicked in. This happens if an individual share trade is a certain percentage above or below the previous price, in Barclays' case 5%. A Stock Exchange spokeswoman said if the market was moving very fast, it allowed the trader to take out the order if it was not intended.
Barclays, which was 9% down at one point, is now around 6% lower. A note from Oriel Securities following a meeting with Barclays last night made interesting reading.
Oriel said that Barclays admitted there was a chance the market would not believe whatever write-off number the bank came out with in November, given the scepticism meted out to the likes of Societe General.
"Although not new, the fact is that several asset classes do not have a price off which to value the underlying [assets]- so questions may well remain," said Oriel.
Barclays also wanted to "avoid the situation at Merrill's where losses had to be restated and managements credibility was undermined."
Meanwhile - still with the credit crunch - the US's fourth biggest bank Wachovia announced it had made $1.1bn of losses on mortgage securities in October and expected provisions of up to $600m to cover losses on its loans.
Not exactly news to thrill the markets in their current mood, and indeed Wall Street has just opened around 130 points lower. The FTSE 100 index is now down 85.5 points at 6296.4 as a consequence.
4.45pm Market close
After a calm start, it ended up being another hairy day for traders, with the FTSE 100 down 77 points at 6304.9 by the close. The main story again was in the financials, with more major write-offs in the US thanks to the toxic loans associated with the struggling US mortgage market.
Barclays came back from its worst levels after its denial of a host of rumours, and ended down 2.4% at 474.5p. Still, it is hard to know when a sense of equilibrium will return.
This may not even happen when the banks report the extent of their exposure. As Barclays itself indicated, the market in its current mood may not even believe whatever figures the banks come up with.
Over the week the leading index has dropped more than 200 points, and some traders believe things could get worse as share volumes fall in the run up to Christmas and the New Year.
Back next week, when a number of large companies including J Sainsbury and SABMiller are due to report.
Both should have something to say about recent takeover developments. In the case of Sainsbury, the failure of the Qatar backed bid, and for SABMiller, investors will be keen to know if it wants to get involved in the hostile approach for Scottish & Newcastle by Carlsberg and Heineken.
