LONDON (ShareCast) - Indications that last night’s gains on Wall Street will continue through to Friday are keeping London sharply higher, with banks offsetting large losses in the mining sector.

US banking giant Citigroup released second quarter losses that were better than feared, enticing investors back into Royal Bank of Scotland, Lloyds TSB and HSBC.

EvenBarclays is wanted despite receiving acceptances from just 19% of shareholders for its open offer. The apathetic response from shareholders means Qatar Investment Authority, Challenger, China Development Bank, Temasek and institutional shareholders will end up with the remaining shares.

Kazakhstan’s ENRC and Kazakhmys plus the Ukraine's Ferrexpo lead miners lower in line with falling metal prices. Copper fell on concerns demand from China will slow as economic growth eases. Xstrata is also posting chunky losses.

Reckitt Benckiser has fallen back after French consumer products group L'Oreal trimmed its guidance for full-year like-for-like sales growth.

Engineer Invensys reports a satisfactory start to the new financial year. Overall operating performance during the first quarter ended 30 June 2008 was in line with expectations.

RBS gave British American Tobacco a lift, raising its recommendation on the firm to ‘buy’ from ‘hold’ saying it thinks tobacco stocks look more attractive than food and household goods companies.

JP Morgan has trimmed its target price on the fashion retailer Next to 1,050p from 1,100p saying it expects retail trends to remain weak next year. The broker, which has a ‘neutral’ stance on Next, has reduced its earnings per share forecasts on the company by 2% for this year and by 7% for next year.

JPM has lowered its target price on financial news provider Thomson Reuters to 1,900p from 2,000p, but kept its ‘overweight’ rating on the company.

Housebuilders have continued their rally from yesterday when UBS said they have been oversold. It said current share prices factor in “overly bearish cuts to net tangible assets and do not reflect that sector debt should be cut by £3.1bn between 2007 and 2009.”

The sector was also helped by Kier Group saying it expects to beat last year’s trading performance, with underlying pre-tax profit in line with current market expectations. Taylor Wimpey posted strong gains, as has Barratt Developments and Persimmon.

Aberdeen Asset's funds at the end of June rose to £113.6bn from £107.2bn three months earlier despite a decline in performance. Net new funds amounted to £877m and acquisitions added a further £7.3bn offsetting a fall of £1.8bn in investment performance.

Electrocomponents says organic growth has slowed compared to the first half last year. The distributor said group sales were up 1% in the three months to June with international sales up 4% and UK sales down 2%.

Bid speculation has lifted Cape Lambert Iron Ore as it confirmed it met with people from Merrill Lynch and Evraz Group in Singapore yesterday, but said no information from that meeting needs to be advised at this time.

Shares in educational training firm ILX Group chalked up good gains after the company said its strong momentum had continued into its new financial year.

• News Channel