BHP Billiton gained 3 per cent to £20.83 on talk that a Chinese entity was stakebuilding, matching Chinalco's stake in Rio Tinto in an attempt to have some say in the potential merger of the two companies.

Earlier this month BHP's chief executive Marius Kloppers said he was certain the Chinese would end up owning a stake in BHP just as they had bought into Rio.

Eurasian Natural Resources surged another 3.7 per cent to £14.28 as it released strong first-quarter production figures and a positive outlook, driven by soaring ferrochrome and iron ore prices. Deutsche Bank raised its target price on the Kazakh miner to £15.50.

Rio Tinto was up 1.58 per cent at £67.50, in line with most other miners, still buoyed by talk that BHP could raise its bid.

Better than expected trading figures lifted Compass 2 per cent to 349.25p.

AstraZeneca climbed up 1 per cent to £21.18 after announcing the US Food and Drug Administration has approved Seroquel for the maintenance treatment of patients with bipolar I disorder.

Mortgage banks were on the slide again after Bradford & Bingley said it will raise about £300 million in a 16-for-25 rights issue at an issue price of 82p per share - a 48 per cent discount.

HBOS lost 5 per cent to 462p while Alliance & Leicester dived 4 per cent to 439.5p.

The worst FTSE 100 faller was FirstGroup, which slumped 7 per cent to 556p after accompanying strong full-year results with news it is launching an equity placing of up to 10 per cent. The travel group said this would strengthen its capital structure and increase its flexibility. There are worries that the high cost of fuel and weakening consumer demand for train travel will squeeze its margins.

Sainsbury's lost 3 per cent to 379p after its profits came in slightly below forecasts and Justin King cautioned about intense competition and weaker consumer budgets.

Johnston Press lost 13 per cent to 118p after it announced a £212 million rights issue to avoid breaching its banking covenants amid deteriorating advertising conditions.

Fellow newspaper publishers Daily Mail & General Trust, Euromoney and Trinity Mirror lost ground in sympathy but Yell Group, which is also thought to be close to breaching covenants, was the biggest viictime down 6.4 per cent to 189.5p.

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