LONDON (ShareCast) - Wall Street’s recovery from early weakness helped London erase a little of its three digit deficit, although wayward banks and struggling miners are still hammering the leading index.

The finance sector continues to attract sellers, with HBOS and Barclays feeling the pressure. The former today announced the timetable for its £4bn rights issue and said a trading update will be released in about two weeks time.

Kazakhstan resources company ENRC is in the red as copper prices decline for the third day in row. Vedanta, Antofagasta and Kazakhmys are also lower.

BP and Cairn Energy lead oil stocks south as crude prices sit at two-week lows, but oil services group Amec continued its gains from yesterday when it signed an agreement with BP International to provide engineering and project management services for the oil giant’s offshore developments.

The lower oil price is good news for British Airways, currently the biggest percentage gainer in the FTSE 100.

Alliance and Leicester is also among the best performers after the Daily Telegraph said private equity firm Texas Pacific plans to use its investment in Bradford and Bingley as a launch pad to build stakes in other lenders.

Housebuilders are under the cosh after UBS advised investors to sell a number of companies in the sector. The broker downgraded Persimmon, Bellway and Redrow to ‘sell’ from ‘neutral’. It cut its price target for Persimmon to 400p from 640p, Bellway to 580p from 795p and Redrow to 208p from 285p.

There were also losses at mobile telecoms goliath Vodafone after it began trading without the right to the lastest dividend.

DIY retailer Kingfisher lost early gains as it warned trading remains tough, especially in the UK. First quarter profits rose by 8.9% to £96m on sales to 13 May up 8.6% to £2.49bn, but like-for-like fell by 4.1% with the UK down by 7.9%. "As anticipated, trading remained very tough, especially in the UK, and the poor weather was unhelpful for sales of outdoor products," it said.

Morgan Stanley has double-upgraded its stance on Royal Bank of Scotland to ‘overweight’ from ‘underweight’, saying the bank’s recent rights issue has resolved many of its problems.

In other broker comment, Investec Securities has downgraded its recommendation on hedge fund manager Man Group to ‘hold’ from ‘buy’ on valuation grounds.

Mail order specialist Findel, the company behind the Kleeneze catalogues, continues to be plagued by bad debt worries and leads the FTSE 250’s fallers.

Chloride Group is also sharply lower after Missouri-based Emerson Electric said it was no longer interested in bidding for the power supply company.

Spreadbet firm IG Group reports strong growth across all of its financial businesses throughout the year and expects an increase in revenue of over 50% to around £184m (2007: £122m) with an EBITDA margin of approximately 53% for the year to May.

Sportingbet's operating profit rose by 143% to £7.3m in its third quarter to April with revenues up 25% to £365m. The online betting group added it is confident of meeting full year expectations. The group said that two Turkish UK-based Sportingbet employees who were visiting Turkey on holiday remain in custody, but it has no further information.

Northumbrian Water lifted full year profits by 15.2% to £170m, though cautioned flooding continues to pose difficulties for the company. The dividend for the year rises by 7.1%.

Ulster-based media group UTV has become the latest company to tap the market for funds by means of a rights issue. The company is looking to raise in the region of £49.9m, through a rights issue on the basis of two new shares for every three shares held at 130p.

Meanwhile, the rights issue by sub-prime lender Cattles has received strong support from the company’s shareholders with 96.7% of the shares on offer taken up.

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