Shares in Wolseley led the FTSE 100 fallers on talk that Citigroup had offloaded up to nine million shares in the world’s largest supplier of plumbing, heating and building materials.

The shares were 34p lower at 839p in early morning trading.

Wolseley was closely followed by UK housebuilders, down after UBS downgraded the European construction and building materials sector to "neutral" from "overweight", saying that they faced a “strong headwind” after the slowdown in the US housing market and UK house price trends.

Taylor Wimpey was down 1p at 286.5p and the mid-cap Redrow was off 15p at 391.5p, with the peers Persimmon and Barratt Developments dropping 20p to £10.20, and 13.5p to 742p, respectively.

The FTSE 100 index was up 43.5 points at 6,583.4, as leading stocks rose ahead of Alistair Darling’s Pre-Budget Report (PBR) and a weak overnight finish on Wall Street. All broader indices were also higher.

The FTSE 250 index was up 45.4 points at 11,374.1.

Northern Rock was a significant gainer on reports of bid talk, up 35.5p, or 20.29 per cent, at £2.08.

Other blue chips held on to gains midmorning, in fairly quiet trade ahead of the first PBR from the Chancellor this afternoon and the release of today’s Federal Open Market Committee (FOMC) minutes from the US.

Shares in Barclays also pushed higher, up 6.5p at 669p, after Deutsche Bank resumed coverage on the group with a "buy" stance and price target of 740p, noting that the Barclays Capital & BGI fears are overdone.

Among utilities, Severn Trent was up 41p at £14.74 on reports of a £4.195 billion acquisition. United Utilities pushed up 6.5p to 720p.

Friends Provident took on 3p to 176.6, and Resolution gained 2.5p to 683.75 after yesterday's merger developments.

J Sainsbury was a substantial loser, down 5p at 579p after reports that the Sainsbury family may derail the Delta Two bid.

Independent oil companies surged after Burren Energy rejected an approach by Eni. Premier Oil rose 53p to £10.88, Soco gained 66p to £21.23, Tullow gained 17.5p to 603.5p and Venture put on 24p to 740.5p. Meanwhile, Burren shares leapt 20 per cent to £11.40.

Miners slipped against a background of lower commodity prices, with Lonmin down 39p at £35.09, Antofagasta off 8.5p at 802p and Kazakhmys, down 29p at 14.73.

Among the second-liners, LogicaCMG surged 14.75p to 166p after an announcement that the BT strategy chief Andy Green is to become its new CEO, with Landsbanki terming the move a “strong appointment” and reiterating its "buy" rating.

Carpetright gained 57p at £12.18 after its confirmation that Lord Harris of Peckham, the chairman and chief executive, had made a revised non-binding offer for the company, and after a trading update.

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