The bank said it aimed to raise $5.1bn through the rights issue and would cut 15,000 jobs by 2018.
The news came as Standard Chartered announced a third-quarter pre-tax loss of $139m for the three months to September.
After falling for much of the day, the FTSE 100 index closed higher.
It rose by 0.34%, or 21.81 points, to 6,383.61, boosted by oil firms and miners, helped by a rise in the price of crude oil.
Shares in housebuilders fell after broker Liberum cut its ratings on a number of companies in the sector arguing valuations were "too optimistic".
Taylor Wimpey fell 5%, Barratt Developments dropped 3.85% and Persimmon was 2.4% lower.
On the currency markets, the pound fell 0.11% against the dollar to $1.540 but rose 0.55% against the euro to â‚¬1.4074.
(Close): Standard Chartered was the biggest faller on the market, dropping 8.7% after the Asia-focused bank announced plans for a big rights issue.