LONDON (ShareCast) - Footsie is trading in a very narrow range with buoyant miners and oils doing battle with depressed banks and housebuilders to determine the direction of the index.

Eurasian Natural Resources, Antofagasta, Kazakhmys, Rio Tinto, Xstrata, Tullow Oil and Cairn Energy are among the best performers as oil prices and metal prices rise even further.

RBS launched a £12bn rights issue on the basis of 11 new shares for every 18 existing shares at 200p per share. RBS added it estimates the effect on capital of write-downs in respect of credit market exposures at £5.9bn before tax. Disposals of insurance businesses Direct Line and Churchill will generate a further estimated £4bn.

Speculation is now rife that other banks might follow suit, with the spotlight shining brightest on HBOS and Barclays.

Bradford & Bingley says its liquidity position is funded into 2009, despite on-going difficulties in the wholesale markets. It adds margins on loans written in the second half of 2007 were affected by the emerging liquidity crisis which has impacted the overall group margin in the first quarter of 2008, though it has repriced its products recently.

Associated British Foods, the owner of Primark discount clothes stores and the Silver Spoon sugar refiner, posted a 5% rise in interim profit to £282m adjusted, The shares headed lower after the group conceded economic conditions were difficult.

Other retailing stocks follow AB Foods lower, with Home Retail Group, Marks & Spencer, Kingfisher and home shopping company Findel the major sufferers. Meanwhile, sugar producer Tate & Lyle also tracks AB Foods lower.

Housebuilders are friendless after Merrill Lynch downgraded Barratt Developments, Bellway and Redrow from "buy" to "neutral."

Other housebuilders, such as Persimmon and Taylor Wimpey were also under the cosh after the US broker also cut its 2008 industry volume expectation to a 25% decline from a previously forecast 15% drop.

Software group Logica is to cut 1,300 jobs as part of a £110m restructuring programme.

Engineering group Melrose has agreed the takeover of industrial conglomerate FKI for 81.3p per share.

Fiberweb shares slumped by a third as Israeli group Avgol dropped its plans to make a bid for the struggling textiles group.

Logistics software supplier Kewill Systems said it expects full year profits to be better than market expectations.

The share price of Petards was hoisted after the CCTV equipment maker said it is in discussions with a number of parties that could lead to the sale of the company.

Aim-listed oil explore Regal Petroleum has received an early stage approach for its assets in the Ukraine.

Profits at mobile phone gambling group Probability could top forecasts if current momentum continues, it said as the customer acquisition rate soared in the fourth quarter.

Biotech group Protherics fell after a study into the use of its Digibind treatment in pregnant women suffering pre-eclampsia met only one of its two primary targets.

• News Channel