Bargain-hunting investors topped up on RBS shares as the Government began selling off its stake in the bailed-out bank.
UK Financial Investments, which manages the taxpayer’s stakes in RBS and Lloyds, revealed it dumped a 5.4 per cent stake at 330p a share, leaving it with 72.9 per cent still to offload.
The shares were bought at the height of the financial crisis at 500p each, which means the sale has left the taxpayer roughly £1bn out of pocket.
David Madden at IG Index said: “In the long term the return to private ownership will boost the share price, but in the near-term things will get worse before they get better.”
Despite spending much of the session in the red, RBS finished as the best-performing banking stock, up 1.4p at 339p, with stock pickers finding value in the shares at current levels.
A recovery from mining stocks, including BHP Billiton, up 22p at 1,159p, and Rio Tinto, up 38p at 2,470.5p, failed to prop up the FTSE 100, which drifted 2.05 points lower to 6,686.57.
The drug maker Shire was the biggest faller, down 335p to 5,395p as investors baulked at the $30bn (£19bn) valuation of its proposed tie-up with Baxalta, a US firm that makes treatments for rare diseases. Last year, the US giant AbbVie called off plans for a takeover of Shire amid widespread condemnation of so-called tax-inversion deals.
Meggitt reassured the City when it maintained its full-year guidance at a turbulent time for the aerospace industry.
The engineer, which makes aircraft equipment, flew 36.8p higher to 501p as a strong showing in the first half from its aerospace and defence arms offset the troubles in its energy division, which has been hit by the fall in the oil price.
On Aim, African Potash leapt 30 per cent to 0.40p after striking a deal with Comesa, a free trade union of 20 African nations, to supply 500,000 tonnes of fertiliser over three years.
Institutional buying sent the software firm Adgorithms up 20p to 150p, while Clean Air Power jumped 0.17p or 50 per cent to 0.51p as the company confirmed it is still in takeover talks.Reuse content