LONDON (ShareCast) - London has shrugged off weak drug majors and a mixed mining sector to extend its advance ahead of what is expected to be a lower start on Wall Street.

Defence giant BAE Systems is leading the rally after Lonrho said it is adding three BAE 146 aircraft to its African fleet.

Household goods retailer Home Retail is also well ahead after performing “very strongly” in the first half, with benchmark pre-tax profit up 40% thanks to higher sales at Argos.

The group, which demerged from GUS in October last year, reported a profit for the 26 weeks to 1 September of £149.8m, up from a pro forma £107.2m a year ago.

Carphone Warehouse is among the top performing blue chips on news it has signed a wholesale deal with Vodafone to launch a new contract called Talkmobile.

But miner Kazakhmys tumbled after it said total copper cathode output declined 5% in the third quarter, adding that overall production for the year could be lower than 2006.

Broker Seymour Pierce responded by downgrading the stock from “hold” to “underperform”. Lonmin, Vedanta Resources and BHP Billiton are also in the red, while Xstrata and Anglo American are higher.

Elsewhere in the sector, Rio Tinto improved after it said its offer for Canadian aluminium business Alcan has been successful, having received 79.41% acceptances for the $38.1bn cash deal.

Insurer Friends Provident is in favour after it said life and pensions new business increased 35% in the third quarter. It also announced new target returns of capital to shareholders after the merger between Friends and Resolution. Fellow insurers Aviva and Prudential joined the advance, but Resolution lost ground.

Household products group Reckitt Benckiser fell despite raising its full year target for net revenue and income growth after reporting good third-quarter figures at midday. Investors were unimpressed with adjusted operating margin flat at 21.8%.

GlaxoSmithKline is in the red after the drug major said third quarter profit before tax fell by 7% due to generic competition in the US and a 38% drop in sales of diabetes drug Avandia. AstraZeneca is down in sympathy.

Relations between Scottish & Newcastle and Carlsberg continue to deteriorate. Yesterday, the British brewer accused Carlsberg of breaching the terms of the Baltic Beverages joint-venture agreement, but the Danish brewer today refuted the claims.

Oil major BP has announced plans to cut around 350 jobs as part of a restructuring of it North Sea organisation headquartered in Aberdeen.

Meanwhile, Intercontinental Hotels has announced it will take an exceptional charge of £30m to finance the worldwide relaunch of the Holiday Inn brand.

Among the mid-caps, Davis Service said it saw double digit growth in both revenue and operating profits in the third quarter plus higher interest costs, reflecting acquisitions made in the first half.

Engineering firm Bodycote saw sales for the nine months to the end of September grow 18.7% at constant exchange rates and expects all its markets to remain buoyant except automotive.

Elsewhere, Stuart Blake has stepped down from his role as chief executive of recruitment company Greatfleet with immediate effect due to ill health.

BP Marsh & Partners, a niche venture capital provider to early stage financial services businesses, has seen its net asset value excluding deferred tax rise 12.8% on last year.

Document management specialist IDOX is sharply higher after a group of its top ranking directors lifted their stake in the company.

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