Standard Chartered lost nearly 5 per cent as a rumour spread that the emerging markets bank would have to help to prop up an $18 billion ($9 billion) mortgage-backed fund that it manages.

Even though a Standard Chartered spokesman insisted that the fund – Whistlejacket Capital, an SIV or structured investment vehicle – “is triple-A rated and has no credit problems” and that the bank’s direct exposure in terms of capital invested was only $250 million (£124 million), the company’s fall got worse throughout the day and the shares closed down 77p at £14.94.

Investors were not prepared to take any chances before the long weekend and a day after it emerged that a Barclays executive had quit, apparently over the troubles of SIV-lite funds that he had helped to set up.

The FTSE 100 managed a sixth successive day of gains, closing up 23.2 points at 6,220.1, helped by positive economic news from the United States on durable goods orders and new homes sales. However, traders were cautious, pointing out that volumes were thin, with many of their number were away for the weekend already.

Perhaps an indication of the nerves was the sudden drop in Barclays’ price in late trading as rumours spread that Royal Bank of Scotland, leading the rival consortium for the hand of ABN Amro, was about to cut its bid price. Barclays closed down 16½p at 611p and ABN Amro shares in the Netherlands also dropped. RBS fell 2½p to 581p.

Rising oil prices and worries about a shareholder lawsuit over price-fixing hurt British Airways, off 10¼p at 409¼p. Northern Rock lost ground again after a rally in the past few days and was down 17½p to 739½p as hopes of a bid faded.

SABMiller, the South Africa-based brewer, revealed that it had bought four more breweries in China. Its shares fell at first but recovered to close up 3p at £12.97 as analysts pointed to industry figures showing that prices of Budweiser beer, a rival to its Miller beer, in American supermarkets had increased 2.7 per cent in the four weeks to mid-August, outstripping a 1.3 per cent volume decline.

Sage Group, the only tech stock in the blue-chip index, was the best performer, up 7¼p to 233¼p after Merrill Lynch upgraded it to a “buy” from “neutral”, saying that its valuation had fallen to levels not seen since the middle of the last recession. On Thursday Dresdner Kleinwort pointed out that it had heard from customers that demand for Sage’s software in the US was stronger realised.

Rising commodity prices and a note from Lehman recommending miners helped Rio Tinto to add 77p to £33.99 and Xstrata 51p to £20.04. Lehman singled out the latter as a “buy” because of its exposure to rising copper prices. Anglo American was up 35p to £27.63, even though Lehman told investors that the credit crunch would hit the price of assets – such as Tarmac – that it is trying to sell.

J Sainsbury rose 11½p to 544½p as traders began to speculate again that Delta Two could sweeten its bid enough to satisfy the Sainbury family.

— New York: Shares on Wall Street rose on solid economic readings that countered the bleak sentiment that has blanketed the markets recently. The Dow Jones industrial average closed at 13,378.90 points, up 143.00.

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