LONDON (ShareCast) - A revival of banking sector worries, sparked by Bradford and Bingley’s capital injection and profits warning has Footsie on the back foot this morning and testing the 6,000 support level.

Bradford & Bingley is to get a cash injection of £179m from US private equity group TPG at 55p per share. It will take a 23% stake in the mortgage lender through the investment. Bradford & Bingley made a loss in the first four months of 2008 and added that things remain tough.

HBOS and Royal Bank of Scotland, which have also launched huge rights issues to shore up their finances, are also under the cosh along with Alliance & Leicester and Lloyds TSB.

Both HBOS and RBS felt obliged to issue statements intended to pacify the market this morning, with HBOS saying that current trading remains satisfactory and that its fully underwritten rights issue is proceeding according to plan, while RBS noted that UK buy-to-let mortgages are only 1% of its UK loan portfolio and confirmed that the trading patterns remain as per the guidance provided in the interim management statement of 22 April.

London Stock Exchange has also slipped back after Morgan Stanley cut its target price to 945p from 1,060p and kept its ‘underweight’ rating on the stock, citing cyclical factors. The broker also said that consensus opinion underestimates pressure on pricing as LSE contends with competition.

Miners are up again led by BHP Billiton and Rio Tinto, which is offsetting some of the banking woe. Vedanta Resources said its Indian subsidiary Sterlite Industries has agreed to buy assets of bankrupt Asarco, a Tucson based mining, smelting and refining company, for $2.6bn in cash.

Tullow Oil also appears among the risers now, even as crude prices stay well below $130 a barrel.

Away from Footsie, Imperial Energy is going strong after saying it has discovered oil at the Kiev Eganskoye field, east of the OB River, in Russia’s Tomsk region. The well is being drill stem tested and is currently free flowing without stimulation or pumping at a rate of 1,575 barrels per day.

Shares in oil and gas explorer Dana Petroleum rallied after the group confirmed it had made a significant gas discovery with its first exploration well in Egypt. Dana said flow test results 'are very encouraging' at the WEB-1X well in the West El Burullus area in the Nile Delta.

Oil and gas company Aminex has been awarded a new 11-year Production Sharing Agreement (PSA) in Tanzania. The new PSA is known as Songo-Songo West and is offshore, adjacent to the western edge of the Songo-Songo gas field, and also near to Aminex’s recent gas discovery at Kiliwani North.

Also in the oil sector, Morgan Stanley has started coverage of Oilexco with an overweight rating and a 1,140p price target saying the North Sea oil and gas explorer is likely to benefit from good news in coming months.The broker cited short-term drilling in the UK and the likely valuation of the recently identified Huntingdon column in the North Sea in the second half of 2008. Morgan also began coverage on the Middle East and Africa-focused explorer Addax with an ‘equal-weight’ rating and a 3,540p price target.

ABN Amro has started coverage on the bus and train operator Go-Ahead Group with a ‘buy’ recommendation and a 1,920p target price. The broker said that pressure on the group’s share price from rising fuel costs, exposure to London commuters and the expiry of its Southern franchise was limited.

Electrical components group Chloride lifted profits by 48% last year £31.1m on sales up 31% to £268m. The group added it had a record order book with sales, operating profit and operating margin all currently well ahead of this time last year.

Shares in public sector software and services supplier IDOX gained sharply after it said half-year profits are expected to be well ahead of previous forecasts, helped by cost savings and margin improvements.

Pilat Media swung into a first-quarter pre-tax profit but shares in the group plummeted after it said that revenue growth this year will be lower than anticipated.

FTSE 100 - Risers
Tullow Oil (TLW) 910.50p +2.30%
Schroders NV (SDRC) 925.50p +1.59%
Cadbury (CBRY) 684.50p +1.56%
British Energy Group (BGY) 745.00p +1.50%
Smith & Nephew (SN.) 549.00p +1.39%
BHP Billiton (BLT) 1,937.00p +1.20%
Rio Tinto (RIO) 6,110.00p +0.91%
Man Group (EMG) 626.50p +0.89%
Xstrata (XTA) 4,018.00p +0.73%
Compass Group (CPG) 377.25p +0.60%

FTSE 100 - Fallers
HBOS (HBOS) 367.00p -8.25%
Alliance & Leicester (AL.) 404.25p -4.94%
London Stock Exchange Group (LSE) 979.00p -4.67%
Experian Group (EXPN) 389.00p -4.13%
Barclays (BARC) 362.00p -3.47%
British Land Co (BLND) 774.00p -3.37%
Royal Bank of Scotland Group (RBS) 221.00p -3.28%
Hammerson (HMSO) 887.50p -3.01%
Land Securities Group (LAND) 1,372.00p -2.83%
Eurasian Natural Resources (ENRC) 1,418.00p -2.81%

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