Taylor Wimpey’s shares leapt on a report in a trade magazine that it is in talks to sell a third of the company to a private equity buyer.

The builder is considering the stake sale as an alternative to a £500 million share placing as it looks to shore up its finances, Building magazine said.

Shares in the group jumped 15 per cent to 40.25p after the report said a deal could be “months, rather than weeks, away”.

The company has admitted it is due to breach bank covenants on its £1.7 billion debt in February next year without rescue financing. Last week it admitted it had been unable to persuade shareholders to back a share issue.

The FTSE 100 lost 28.6 to 5379.2 by 11.15am.

Mining stocks and oils were amongst the few gainers; ENRC was the top blue-chip riser, up 5.7 per cent at £11.02.

Thomas Cook Group edged higher after carrier Air Berlin dropped its plans to acquire Thomas Cook’s charter airline Condor.

Royal Bank of Scotland lost 2.4 per cent after Zurich dropped out of bidding for its insurance business late yesterday.

Big fuel users such as British Airways continued to be hurt by the higher oil price and the carrier's stock fell 2.5 per cent.

John Lewis drove Marks & Spencer down 5 per cent to 229p after the privately owned group said sales at its 26 UK department stores fell 1.3 per cent year-on-year in the week ended July 5.

Amec gained 1 per cent to 869.5p after it won the big contract to clean up Sellafield.

The threat of industrial action at Argos drove parent company Home Retail Group down 4 per cent to 196p.

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