Market report - Tuesday Update: If you want to test your patience, buy shares in Royal Bank of Scotland.

That is the advice of Citigroup, which today recommended clients snap up the stock, saying that the NatWest owner now has sufficient capital to deal with a prolonged recession.

Assuming we are not heading for a full-blown 1930s-style economic meltdown, the City big gun made the bold call of declaring the bank should not need another fundraising or to sell off any of its assets.

In a note titled In for the Long Haul, analyst Tom Rayner warns there will be "no fast track to redemption" for RBS and that the bad news will continue to pour out of the bank in the coming months, with significant writedowns in the fourth quarter of 2008. But, over the long term, he believes the shares look tempting.

Rating RBS a buy, Citi sets a target price of 100p for the shares, which have risen 31% in the past week and today climbed another 3.3p to 54.1p.

The upbeat verdict came as RBS's £15 billion rights issue came to a close with its shares still languishing well below the price of its 65½p cash call. The results will be revealed on Friday but the only takers are expected to be the bank's directors. This leaves the government with a 58% stake in the bank and taxpayers nursing paper losses of around £2.5 billion. It is a far cry from its cash call in June when 95% of investors signed up, paying 200p a pop.

The FTSE 100 added to yesterday's mega-gains, with the benchmark index recovering from early losses to move up 81.08 points at 4234.04 in volatile trading. Standard Chartered claimed first place among the top flight, surging 160p to 885½p, despite a string of gloomy broker notes, in what traders said had all the hallmarks of a classic bear squeeze. In New York, the Dow rose 124.72 points to 8568.11.

The gains in London came despite losses from most of the heavyweight miners after BHP Billiton walked away from its takeover bid for rival Rio Tinto. Rio was the Footsie's biggest loser, shedding 750p to 1700p, amid talk the mining giant may have to refinance its debts with a rights issue. But relief that it had not taken on its rival's debts perked up BHP, which climbed 171p to 1151p.

Traders put the rival miners' contrasting fates down to hedge funds, who it was said have been shorting Billiton and buying Rio, and were today closing their positions.

Taylor Wimpey was the biggest faller among mid-caps as rumours spread it may be forced to swap debt for equity. It also endured the double whammy of a dire set of mortgage lending figures from the British Bankers' Association and souring broker sentiment as Credit Suisse slashed the housebuilder's target price from 70p to 10p. Taylor's shares plunged 2.15p to 4.85p, wiping another £22.7 million off its value. Formed by a merger last year, the group was valued at £4.32 billion on its first day of trading; today it is worth a mere £51 million. Credit Suisse said it sees no grounds for optimism about the industry in general, and has also cut its forecasts for Persimmon, 23p lighter at 218½p, and Barratt Developments, down 5½p to 50p.

Topps Tiles delivered a dire set of full-year results and scrapped its dividend, hit by the property market turmoil. The figures sent its shares plunging to a 10-year low, off 2p at 19p, as brokers issued a series of damning notes on the tiling and flooring retailer. WH Ireland says its shares remain a sell and warns it expects margins to continue to fall.

Panmure Gordon jumped on the bandwagon, downgrading the stock to sell and slashing its target price from 40p to 15p.

But Dresdner Kleinwort has a brighter outlook, arguing that the business model remains strong. Dresdner trimmed its price target to 50p from 80p but still rates the shares a buy, saying that banks still seem to be in support of the company.