LONDON (ShareCast) - London has crept closer to 5,900 as banks remain down in the dumps on talk that US giant Merrill Lynch is preparing to announce further write-downs.

Finance plays Alliance & Leicester, Barclays, Royal Bank of Scotland and HBOS are all mired in the red, as is BHP Billiton admitting it is not aware of any proposed acquisition by Chinese authorities to buy a substantial stake in the miner.

Antofagasta, Rio Tinto, Lonmin, Xstrata and Anglo American are also among the main fallers.

In the same sector, Vedanta Resources said aluminium production in the fourth quarter was the highest ever quarterly production, though zinc production in Zambia fell in the period.

The widely anticipated quarter point cut in UK lending rates to 5%, the third drop in five months, had little impact on leading shares.

But British Energy proved a bright spot on talk that German power group RWE has tabled an offer for the British nuclear operator that values the company at as much as £11bn.

The UK firm also said today that reduction in output from refueling operations next year is expected to increase as nuclear output for the year was lower but still marginally ahead of current market expectations.

Travel operator Thomas Cook is confident it will meet expectations for the year, with the winter performance in line with forecasts and summer trade continuing to go well.

Security firm G4S said it has sold its German security systems businesses, G4S Sicherheitssysteme and an affiliated company, for €10m (£7.7m) in cash.

Scottish & Southern Energy falls back after the power supplier was downgraded to “neutral” from “overweight” by JP Morgan.

Among the FTSE 250, shares in Enodis rallied after Manitowoc said after the close yesterday it may offer 260p per share for the food equipment manufacturer.

DSG International fell after the electrical retailer has issued its second profit warning of 2008 due to challenging markets in the UK, Italy and Spain as consumers focus on cut-price deals.

Recruitment firm Hays saw like for like growth in net fees of 17% in the first quarter despite a slowdown in the UK & Ireland as Asia Pacific and Continental Europe enjoyed strong demand.

India-focused oil group Hardy Oil and Gas said annual profit fell but added that it had made an encouraging start in 2008.

Ryanair, the no-frills airline, is flying at a lower altitude after JPMorgan cut its 2009 earnings per share estimate by 37%, citing increased fuel costs.

Oil and gas explorer Soco International said it noted the recent fall in its share price and confirmed that drilling is still in progress on the Te Giac Den sidetrack well, offshore Vietnam.

Outsourcing specialist Xchanging reported a 17% rise in quarterly revenue and said growth was slightly ahead of expectations due to stronger than forecast volumes and the impact of a stronger Euro.

Renewable energy producer Econergy International raced ahead today after confirming it has received a number of preliminary bid approaches, while renewable energy technologies firm Renewable Energy Generation said it expects to report results ahead of market expectations.

Shares in CeNeS Pharmaceuticals soared on news that it is to be bought by German biotechnology firm Paion.

Business class only airline Silverjet pulled out of its share price tailspin this morning after it said it is in discussions which could lead to an offer for the group.

Electronic tube manufacturer E2v rallied as it predicted results this year will be towards the higher end of market expectations with the outlook "encouraging" for the current year.

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