LONDON (ShareCast) - London's blue chips closed higher as strong oil and mining stocks helped offset a weaker banking sector.

Crude oil prices nearing $120 per barrel helped oil stocks but weighed on oil reliant stocks. Tullow Oil, Cairn Energy and Shell were all doing well, while shares in airlines British Airways and Easyjet and bus group National Express fell.

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 did well 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.

Shire was a late riser after the US Food and Drug Administration approved the pharma group’s hyperactivity drug Vyvanse for the treatment of Attention Deficit Hyperactivity Disorder (ADHD) in adults.

GlaxoSmithKline was 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.

Financial stocks 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 took a beating but other banks were also down heavily. HBOS, Barclays, Lloyds TSB and Royal Bank of Scotland were weak.

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

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 was a big gainer even though it is to raise £200m through a 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.

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

Local newspaper group Johnston Press was 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.

Qonnectis, a data monitoring service provider for utilities and big commercial users of energy and water, was sharply lower after it raised £1.25m via a placing at 1p a share with certain institutional and other investors.

Software group Proactis slipped to a half-year loss of £417,000 from a profit of £278,000 last time and TV screen fitter Venue said it is considering calling a general meeting after shareholder requests.

Shares in LED International soared on news that the group has been awarded a contract to supply a giant LED display screen and outdoor facade lighting for a new hotel development in North Point, Hong Kong.

FTSE 100 - Risers
Eurasian Natural Resources (ENRC) 1,420.00p +8.31%
Shire (SHP) 979.00p +6.59%
Tullow Oil (TLW) 761.50p +4.03%
Royal Dutch Shell 'B' (RDSB) 1,953.00p +3.50%
Cairn Energy (CNE) 3,143.00p +3.05%
BAE Systems (BA.) 472.25p +2.89%
Royal Dutch Shell 'A' (RDSA) 1,976.00p +2.86%
Prudential (PRU) 696.50p +2.80%
AstraZeneca (AZN) 2,132.00p +2.65%
Xstrata (XTA) 4,101.00p +2.58%

FTSE 100 - Fallers
Alliance & Leicester (AL.) 491.00p -7.45%
Thomas Cook Group (TCG) 271.50p -4.40%
HBOS (HBOS) 500.00p -3.85%
Centrica (CNA) 293.25p -3.85%
Royal Bank of Scotland Group (RBS) 345.00p -3.63%
TUI Travel (TT.) 238.50p -3.54%
London Stock Exchange Group (LSE) 1,119.00p -2.86%
Carnival (CCL) 1,954.00p -2.79%
British Airways (BAY) 205.00p -2.38%
Johnson Matthey (JMAT) 1,976.00p -2.32%

FTSE 250 - Risers
Dana Petroleum (DNX) 1,629.00p +17.36%
Game Group (GMG) 260.00p +6.67%
Premier Oil (PMO) 1,575.00p +6.56%
Venture Production (VPC) 740.00p +6.09%
Invensys (ISYS) 290.00p +5.45%
Connaught (CNT) 393.75p +5.28%
International Personal Finance (IPF) 233.50p +4.59%
eaga (EAGA) 139.00p +4.51%
LogicaCMG (LOG) 116.00p +4.50%
Hardy Oil & Gas (HDY) 791.50p +4.28%

FTSE 250 - Fallers
Johnston Press (JPR) 126.25p -8.18%
Sports Direct International (SPD) 112.25p -5.67%
Daily Mail and General Trust (DMGT) 422.25p -5.33%
Aegis Group (AGS) 119.75p -5.15%
BBA Aviation (BBA) 141.75p -4.87%
Aggreko (AGK) 594.50p -4.73%
Barratt Developments (BDEV) 331.00p -4.54%
Galiform (GFRM) 73.75p -4.53%
Catlin Group (CGL) 394.75p -4.53%
GKN (GKN) 283.50p -4.47%

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