Housebuilding stocks today received some respite after weeks of heavy selling dragged companies' shares to all-time lows.

Shares in Persimmon, Britain’s most valuable builder and third largest by production, gained 4.6 per cent with a rise of 19p to 430.75p. After seeing its stock fall by two thirds over the past year, Persimmon is due to be ejected from the FTSE 100 later this month and rejoin the rest of the big housebuilders in the FTSE 250.

Taylor Wimpey, Britain’s largest builder by production, which is also struggling with a large US operation, rose nearly 10 per cent, as its shares hit 77.25p. Barratt Developments, Britain’s largest by production, led the FTSE 250 with a rise of 9.25p to 95 .75p. Barratt has yet to complete a vital £400 million bank refinancing announced a month ago.

Gains across the banking sector and some positive movement in key mining stocks pushed up the FTSE 100 index of blue chip stocks by 1.6 points to 5801.2.

Confirmation this morning from Barclays, Britain's third largest bank, that it is considering taking a cash injection from outside investors to help relieve its liquidity, pushed its shares up 18p to 336p by midday, a rise of 5.7 per cent.

The confirmation followed weekend reports that Barclays was close to raising £4 billion from a group of sovereign wealth funds. Temasek, the Singapore government’s investment fund and already a significant shareholder in Barclays, is understood to be lined up to provide support. It is hoped that the new capital raising will not dilute existing shareholders’ holdings in Barclays shares, which have more than halved in value over the past year.

Barclays also today issued a better-than-expected trading update for May. That lifted sentiment across the banking sector.

HSBC, Britain’s largest bank, rose 1.75p to 823.75p, while Alliance & Leicester, whose shares have been pummelled over the past few weeks over worries in the market relating to solvency, added 9.25p to 348p. A year ago A&L shares were changing hands for about £11.50.

HBOS, the UK’s fourth largest bank that is due this week to publish the prospectus for its £4 billion rights issue, added 1.75p to 323.5p. The rights issue is priced at 275p a share.

Eurasian Natural Resources led the gainers in the FTSE 100, with a rise of 84p to £14.05 after brokers at ABN Amro upgraded their recommendation on the miner from “hold” to “buy” and lifted its price target from £13 to £16.50.

British Airways led the FTSE 100 fallers, shedding 10.25p to 240.25p after the shares went ex dividend.

BlueBay Asset Management was the worst performer among second-line stocks after a profits warning from the fixed-income fund manager left the shares reeling. BlueBay was down 15 per cent just after midday, a fall of 50p to 280p.

Pre-tax profit for BlueBay’s financial year ending June 30 will be “broadly similar” to the £51.6 million earned the year before. Analysts had until today pencilled in a rise in profits to about £60 million.

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