LONDON (ShareCast) - London’s blue chips have recovered a touch but remain in the red, led by banks and oil users.

Financial stocks have reacted badly to the minutes from the Bank of England's last meeting that showed six MPC members voted in favour of the quarter point cut. One wanted a full half-point reduction but two wanted no change. Mortgage approvals for new home purchases also fell to the lowest level since records begun.

Alliance & Leicester has taken a beating but other banks are also down heavily. HBOS, Barclays, and Royal Bank of Scotland are weak again.

Footsie would be much lower without a good showing from the mining sector. Higher copper prices prompted Lehman Brothers to upgrade price targets across the mining sector this morning. The broker raises its copper price estimates for 2008 and consequently lifts its price targets on Xstrata, BHP Billiton and Anglo American.

Platinum miner Lonmin leads the way even though it cut its estimate of full year production from 860,000oz to 775,000oz due to the ongoing power supply problems in South Africa.

GlaxoSmithKline is another riser on plans to boost it presence in sirtuins, a recently-discovered class of enzymes, with the acquisition of Sirtris Pharmaceuticals for approximately $720m. GSK said the deal will significantly enhance its metabolic, neurology, immunology and inflammation research efforts.

Johnson Matthey was among the major fallers after UBS downgraded the speciality chemicals company to ‘sell’ from ‘neutral’ on valuation grounds.

Crude oil prices near $120 per barrel are hurting airlines British Airways and Easyjet and bus group National Express. Oil stocks are higher though led by Tullow, Shell and Cairn.

Elsewhere, shares in Dana Petroleum rallied on news that the group has discovered oil at the West Rinnes structure in Block 210/24a in the North Sea.

Sub-prime lender Cattles is a big gainer even though it is to raise £200m through a up to 163m new shares at an issue price of 128p, a deep discount to yesterday's closing price of 219.5p. The 9-20 rights issue has been fully underwritten by Citi and HSBC. The funds will be used to help its application for a banking licence, Cattles said.

Vaccine maker Acambis accompanied news of a ten-year contract worth $425m to supply the United States government with a smallpox vaccine with a placing to raise £40m.

Mobile power specialist Aggreko reports revenue grew by 20% in the first three months of the year, adding it confident of further good progress in 2008.

Local newspaper group Johnston Press is down in sympathy with a warning from main rival Gannett that the weak UK property market has hit ad revenues.

Drug developer Alizyme slumped on news it has ended development of its drug renzapride in constipation-predominant irritable bowel syndrome following results from a final stage clinical trial.

Acquisitive environmental consultant RPS Group said results in the first quarter of 2008 have “substantially exceeded” those seen in the same period of last year.

Worries about its applications side sent shares in IT hardware supplier Morse slipping back despite progress elsewhere.

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