LONDON (ShareCast) - London pulled back earlier losses near the close as traders shrugged off talk that US giant Merrill Lynch is preparing to announce further write-downs.

Reports that an auction is under way for British Energy lifted the nuclear energy specialist and helped the mood. Both Centrica and German power group RWE have reportedly tabled offers around the £11bn mark, or 700p per share.

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

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

Antofagasta, Rio Tinto, Lonmin, Xstrata and Anglo American were re 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.

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.

FTSE 100 - Risers
Eurasian Natural Resources (ENRC) 1,180.00p +6.69%
British Energy Group (BGY) 739.50p +5.42%
Capita Group (CPI) 679.50p +2.57%
Kazakhmys (KAZ) 1,726.00p +2.55%
British Airways (BAY) 227.25p +2.25%

FTSE 100 - Fallers
Alliance & Leicester (AL.) 495.50p -5.80%
ICAP (IAP) 592.00p -4.52%
Hammerson (HMSO) 1,031.00p -4.00%
London Stock Exchange Group (LSE) 1,246.00p -3.56%
Schroders (SDR) 1,010.00p -3.53%

FTSE 250 - Risers
Enodis (ENO) 230.00p +51.82%
JD Wetherspoon (JDW) 292.25p +7.94%
Mitchells & Butlers (MAB) 334.75p +5.10%
Venture Production (VPC) 663.50p +4.08%
Bodycote International (BOY) 203.75p +3.95%

FTSE 250 - Fallers
DSG International (DSGI) 59.50p -8.46%
Melrose Resources (MRS) 330.00p -6.98%
PV Crystalox Solar (PVCS) 130.25p -6.63%
Savills (SVS) 297.50p -6.08%
Collins Stewart (CLST) 124.75p -6.03%

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