Traders of mortgage banks outlined a tale of two cities yesterday. Steven Crawshaw of Bradford & Bingley had the best of times, touring the City over the past three days, dining with large institutions and rating agencies and reassuring them about the financing. “They’re priced for a major cockup, which isn’t going to happen” said one banker who had seen him, adding “Steve is a very persuasive guy.” B&B duly recovered 9½p to 290½p.

But Alliance & Leicester had the worst of times – losing 22½p to 729½p – on poor UK mortgage figures from the British Bankers’ Association and fears over its exposure to sub-prime mortgage debt.

In September A&L revealed that it had £390 million invested in SIV funds and soothed that they were 99 per cent triple-A rated. But the value of assets in SIV funds has plunged and rating agencies revealed this week that one such, the triple-A rated Axon Financial, would have to be wound up and that its asset value had more than halved in two and half months to mid-September.

The FTSE 100 was driven up 94.3 points to 6,576.3 as Vodafone, up 11.5p to a new five-year high of 189.7p, surfed a wave of telecoms euphoria. “Anyone would think we’re in a bull market,” said one trader, cracking open the metaphorical bubbly.

France Télécom was the cause for all the joy. It revealed that Orange had increased third-quarter revenues by 7 per cent in the UK largely on the back of data transmission. This helped to reinforce talk that Vodafone’s 3G investments may finally be starting to pay with soaring data use. JPMorgan on Wednesday pointed out that the operator had dramatically raised subscriptions in India and may unveil a plan to offer a cut-price service to India’s poor, driving penetration ever further.

Carphone Warehouse advanced 13p to 349½p on a rumour that Vodafone was about to hand it back its phone distribution business and BT also benefited, rising 11¾p to 320p.

Refreshing its Holiday Inn brand appears to have paid off already for InterContinental Hotels Group. The shares soared 61p to £10.95, helped by a big shove from ABN Amro which lifted its target price from £13.90 to £15.10, saying macroeconomic concerns had been overdone and international tourism would grow over the long term.

Home Retail Group, owner of Argos and Homebase, was up 19¾p to 412¾p as it continued to benefit from Wednesday’s better than expected figures.

Capita was the worst performer, off 41p to 700p, on losing the contract to run London’s congestion charge.

Smith & Nephew closed up 10p at 633½p as vague hopes of a bid offset a devastating profit warning from US peer Zimmer over projected US sales of its hip joints. Dealers are braced for a sell-off today. Continuing bid talk pushed Cairn Energy up another 18p to £24.31. As stated here yesterday, ONGC Mittal as well as BP are rumoured predators.

New York: Wall Street ended slightly lower in uneven trading as investors tried to gauge the health of the US economy through reports that showed a rise in new home sales but also a drop in durable goods orders. The Dow Jones industrial average closed down 3.40 points at 13,671.90.

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