FTSE down as banks rise but commodities weigh

By Michael Taylor

LONDON (Reuters) - The FTSE 100 index of Britain's leading shares ended down on Tuesday during a choppy trading session as easing credit fears lifted banks but commodities weighed as platinum and oil prices fell.

The index was 5.8 points, or 0.1 percent lower at 6,500.4 after hitting a high of 6,567.0 earlier in the day.

A weak start to trade in the U.S. markets dented U.K. sentiment, after the National Association of Realtors said its Pending Home Sales Index in August fell to the lowest reading since records began in January 2001.

But financial stocks were unaffected, as hopes that the credit crunch is now easing pushed Alliance & Leicester, Barclays and HBOS higher.

Troubled mortgage lender Northern Rock, which in early trade lost more than 15 percent, added 2.7 percent as traders cited vague market talk of a rescue package at 175 pence per share.

Traders also cited rumours that Northern Rock's buyout fund suitors -- which media reports named as JC Flowers and U.S. firm Cerberus -- were due to meet the bank later on Tuesday.

Northern Rock declined to comment.

Housebuilders were in demand, with Taylor Wimpey 4.7 percent higher, Persimmon up 5.9 percent and Barratt Developments gaining 4.2 percent, as traders said the sector was aided by short covering ahead of the Bank of England's interest rate decision on Thursday.