LONDON (ShareCast) - Tumbling oil prices, buoyant banks and bumper gains at London Stock Exchange helped blue chips cancel mining sector losses and finish a volatile session with a decent lead.

LSE was in demand after ending at a two-year low last night. The exchange operator lost out to rival NYSE Euronext in the race for 25% of the Qatar stock exchange.

Oil prices plunged over $4 a barrel to below $133 in New York after an unexpected rise in crude supplies last week. Stockpiles jumped by 800,000 barrels, according to the Energy Information Administration. The news was a welcome boost to fuel guzzling airline British Airways and energy hungry cruises operator Carnival.

Today’s advance also owed something to the banks, which improved after Barclays unveiled a £4.5bn fundraising at only a modest discount to the current share price. A group of Middle East and Far East investors are backing the deal, with existing shareholders also able to give the bank some more cash, at 282p a time, if they want to. Royal Bank of Scotland and HBOS also did well.

Pub groups were better after Punch brought forward its trading update to last night. Its balance sheet is strong, business performance is in line with expectations and it remains confident of meeting full-year profit expectations. Enterprise Inns and Mitchells & Butlers rose in sympathy.

Rexam found friends after Credit Suisse raised its rating on the can maker to ‘outperform’ from ‘neutral’ in anticipation of a return to growth following a sluggish two years.

Weaker metal prices dented miners. Xstrata, Anglo American, Rio Tinto, Lonmin, BHP Billiton and Kazakhmys are among the heaviest fallers.

Mining giant Anglo also defended its planned £200m investment in Robert Mugabe’s troubled Zimbabwe, emphasising its responsibility to more than 650 local workers and their families, although it did say it was reviewing the situation.

Bradford & Bingley, the embattled mortgage bank, was up on a report it is close to opening its books to Resolution. But even a Morgan Stanley upgrade to ‘equal-weight’ from ‘under-weight’ and price target up 50% to 75p couldn't prevent losses by the close.

Elsewhere, bus and train group Stagecoach reported a 7.6% rise in full-year pre-tax profits, helped by strong passenger volume growth across the group, and said the current year has started well. But eth firm, which has a 49% stake in Virgin Rail, warned that there was a significant risk that Network Rail would not be able to upgrade the West Coast Main Line on time.

Kesa Electical bounced back despite JP Morgan cutting its price target on the electrical retailer to 200p from 240p. It kept its ‘overweight’ rating on the stock following Tuesday’s results.

Car dealer Inchcape reports total sales for the five months to May up 6.3% in sterling terms and in line with the same period last year in constant currency. Like-for-like sales in constant currency were 1.4% ahead of the prior year and pre-tax profit was up 9%.

Engineering consultant WS Atkins lifted full year profits by 31% to £91.9m from £70.1m on revenues up by 11% to £1.31bn. "Our markets remain strong and as the group continues to improve its services we are confident that the group will achieve further good progress in the year," it added.

Market research group Taylor Nelson Sofres has grown revenue by almost 20% during the first five months of the year and by 6% on an underlying basis, more than predicted.

Powered access platform specialist Lavendon reports revenues for the five months ending 31 May 2008 have increased by 37% compared to the same period last year, with operating margins continuing to improve. "The group continues to trade in line with our expectations," it added.

Flomerics's hopes for a white knight to see off a bid from Mentor have taken a dent as US firm Autodesk decided against making a rival offer.


FTSE 100 - Risers
London Stock Exchange Group (LSE) 952.00p +14.08%
British Airways (BAY) 229.00p +8.53%
Next (NXT) 1,027.00p +7.03%
Barclays (BARC) 331.00p +6.52%
HBOS (HBOS) 292.00p +6.28%
Kingfisher (KGF) 119.00p +5.87%
Enterprise Inns (ETI) 408.00p +5.77%
Carnival (CCL) 1,758.00p +5.46%
Marks & Spencer Group (MKS) 350.25p +5.26%
Standard Chartered (STAN) 1,569.00p +5.09%

FTSE 100 - Fallers
Eurasian Natural Resources (ENRC) 1,342.00p -4.96%
United Utilities (UU.) 690.50p -4.36%
Anglo American (AAL) 3,285.00p -4.12%
Xstrata (XTA) 3,986.00p -4.02%
Cairn Energy (CNE) 3,039.00p -3.34%
BHP Billiton (BLT) 1,850.00p -3.19%
Rio Tinto (RIO) 5,860.00p -2.50%
Kazakhmys (KAZ) 1,566.00p -2.43%
Lonmin (LMI) 3,067.00p -1.95%
John Wood Group (WG.) 469.50p -1.93%

FTSE 250 - Risers
Beazley Group (BEZ) 110.00p +14.58%
Mitchells & Butlers (MAB) 221.50p +8.71%
PV Crystalox Solar (PVCS) 196.75p +7.22%
DSG International (DSGI) 45.00p +7.14%
Aberdeen Asset Management (ADN) 135.00p +6.72%
easyJet (EZJ) 287.50p +6.28%
Ladbrokes (LAD) 277.00p +6.03%
Kesa Electricals (KESA) 167.00p +5.86%
Home Retail Group (HOME) 223.25p +5.81%
Catlin Group (CGL) 357.75p +5.76%

FTSE 250 - Fallers
Electrocomponents (ECM) 142.75p -6.70%
Stagecoach Group (SGC) 264.50p -5.03%
Barratt Developments (BDEV) 71.25p -4.68%
Johnston Press (JPR) 66.00p -4.35%
Mecom Group (MEC) 23.00p -4.17%
Davis Service Group (DVSG) 442.50p -3.80%
Dairy Crest Group (DCG) 327.50p -3.61%
Daejan Holdings (DJAN) 2,525.00p -3.55%
Rentokil Initial (RTO) 102.00p -3.09%
888 Holdings (888) 149.00p -2.93%

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