LONDON (ShareCast) - London drifted close to the danger zone mid-afternoon as Wall Street lost its early advantage, although a popular banking sector and buoyant leisure firms saved the day.

British Airways rallied despite oil prices nudging $119 a barrel as German airline Lufthansa delivered strong first-quarter results and confirmed full-year profit guidance.

There were also gains for Thomas Cook, InterContinental Hotels and TUI Travel as sentiment improved.

Meanwhile, rail and travel companies Firstgroup, Stagecoach and National Express celebrated solid results from sector peer Go-Ahead.

Go-Ahead anticipates delivering full year performance in line with expectations and “significantly ahead” of the record results last year with buses driving the improvement.

Banks firmed, with Alliance & Leicester the pick of the sector, as financials continue to bask in the glow created by better than expected figures from US broker Merrill Lynch. London Stock Exchange and Schroders also benefited from the “Merrill effect”.

Inter-dealer broker ICAP was wanted after yesterday’s announcement that it is to form a strategic alliance with Korea’s largest inter-dealer broker, Korea Money Brokerage, to develop electronic spot foreign exchange trading in Korea.

Tobacco companies remained busy as the OFT launched a probe into alleged cigarette price-fixing involving tobacco companies and retailers. Imperial Tobacco and several supermarket groups were named by the OFT as under investigation.

O'Neill's and Harvester pubs group Mitchells & Butlers says it is not in talks over a possible bid for the whole company, but remains in discussions with private equity investors over the sale of a 29.9% stake at a material premium to the current share price.

Ad agency WPP's first quarter revenues rose by 14.1% to £1.558bn. Revenues in constant currency were up 9% and on a like-for-like basis revenue growth was almost 5%, continuing the growth rates seen throughout 2007 and before, it said. January and February were strong across the board, but March was slower, "somewhat surprisingly in Western Continental Europe." Throughout the quarter, North America remained relatively strong.

Life group Aviva's total life and pensions new business climbed to £8.17bn in the first three months of 2008, up from £7.75bn a year ago and in the middle of market forecasts. Growth in the US, Asia and central and eastern Europe offset tougher conditions in the UK.

Carphone Warehouse got a boost from Morgan Stanley, which has upgraded its viewpoint on the stock to “overweight” from “equal weight”, but ITV slips back after the US bank cut its price target to 55p from 67p.

Shire looked poorly Friday as the UK’s third-largest drugmaker said sales of attention deficit hyperactivity disorder (ADHD) drug Vyvanse would be at the lower end of the range.

Resource stocks headed lower, with Cairn Energy, Antofagasta, Kazakhmys and ENRC leading the retreat.

Car dealer Pendragon says despite a difficult background its performance in the first three months of the year has been encouraging. Metrics of unit sales volumes and operating profits per unit are trending in a positive direction and the group is confident of a satisfactory outcome to the year at the upper end of expectations, it added.

Software group Axon was well ahead on an upbeat trading statement while IBSOpensystems has received a bid approach.

Stockbroker WH Ireland is sharply lower after deciding that an unsolicited preliminary bid approach announced earlier this week is not in the best interests of shareholders. Blue Oar admitted it was the interested party.

Computer games developer SCi tumbled on news it is raising £60.1m from a fully underwritten placing and open offer at a big discount to last night’s closing price.

Independent Resources received a massive boost as Italian energy firm ERG agreed to help the AIM listed group develop its underground gas storage facility in the Po Valley.

Oil and gas group PetroLatina spouted higher after bagged a $25m investment from Colombian private equity firm Tribecapital Partners at a premium to the last night’s closing price.

But investors give the cold shoulder to fund manager Polar Capital after its assets under management fell again in March and have now shed over 13% since the start of the year.

Watford Leisure, the company behind Watford Football Club, confirmed it has received a tentative approach and is in ‘very preliminary’ discussions which may or may not lead to an offer being made.


FTSE 100 - Risers
FirstGroup (FGP) 553.00p +4.73%
Alliance & Leicester (AL.) 514.50p +4.36%
British Energy Group (BGY) 785.00p +4.25%
ICAP (IAP) 595.50p +4.11%
British Airways (BAY) 221.25p +4.00%
InterContinental Hotels Group (IHG) 828.00p +3.82%
London Stock Exchange Group (LSE) 1,144.00p +3.62%
Schroders (SDR) 1,055.00p +3.43%
Thomson Reuters (TRIL) 1,611.00p +3.34%
Thomas Cook Group (TCG) 266.00p +3.30%

FTSE 100 - Fallers
WPP Group (WPP) 592.50p -5.95%
Shire (SHP) 940.00p -4.28%
Antofagasta (ANTO) 782.00p -3.28%
Cairn Energy (CNE) 2,906.00p -3.17%
British American Tobacco (BATS) 1,971.00p -2.57%
Reckitt Benckiser Group (RB.) 2,925.00p -1.85%
Persimmon (PSN) 597.50p -1.81%
Kazakhmys (KAZ) 1,664.00p -1.60%
ITV (ITV) 65.10p -1.51%
SABMiller (SAB) 1,196.00p -1.40%

FTSE 250 - Risers
Go-Ahead Group (GOG) 1,657.00p +14.28%
Stagecoach Group (SGC) 221.25p +8.99%
Sports Direct International (SPD) 118.25p +6.77%
Moneysupermarket.com (MONY) 115.00p +6.48%
CSR (CSR) 376.75p +5.98%
National Express Group (NEX) 916.00p +5.83%
WH Smith (SMWH) 406.75p +5.38%
Arriva (ARI) 681.00p +5.34%
Meggitt (MGGT) 291.25p +4.95%
BBA Aviation (BBA) 143.75p +4.36%

FTSE 250 - Fallers
DS Smith (SMDS) 128.50p -9.51%
Barratt Developments (BDEV) 277.00p -5.86%
Taylor Wimpey (TW.) 130.25p -5.27%
Assura Group (AGR) 100.00p -4.31%
Aegis Group (AGS) 113.50p -4.22%
Aquarius Platinum (AQP) 719.50p -4.19%
eaga (EAGA) 133.50p -3.96%
PayPoint (PAY) 530.00p -3.64%
Daejan Holdings (DJAN) 2,618.00p -3.61%
Southern Cross Healthcare Group (SCHE) 330.75p -3.50%

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