LONDON (ShareCast) - Beefy gains among blue chip miners continue to cancel losses across the banking sector, although the lead is slim.

Well-received results from Vedanta Resources helped rival miners improve. The India-focused firm saw first-quarter EBITDA increase 6% to $739m despite lower zinc prices and rising energy and other costs. It enjoyed record first quarter production of 4.6 million tonnes of iron ore, up by 57%.

Antofagasta, Xstrata, Eurasian Natural Resources, Xstrata, Lonmin and Anglo American also advanced, helped by positive words from Dutch broker ING.

British Airways also took off after the airline said it was in merger talks with Spanish peer Iberia. BA, which already has a 13.5% stake in Iberia, said it expected to take several months to reach agreement on the terms.

But banks were troubled again. Barclays, Royal Bank of Scotland and HBOS are big losers, while life insurer Friends Provident and Old Mutual are also down. Yesterday, Merrill Lynch said it will book more write-downs and sell $8.5bn of stock to balance its books.

The tumble came despite Sanford Bernstein starting coverage on RBS and Barclays with ‘outperform’ ratings, saying that the period of banks’ write downs on structured products may be coming to an end.

Oil major BP moved higher after it saw second-quarter replacement cost profit rise 6% to $6,853m as it benefited from the rise in crude prices. BP also said is not possible to predict the outcome of the differences it is having with its joint venture business in Russia TNK-BP. Tullow Oil, Cairn and Shell are up in sympathy. Higher oil prices also helped.

Chemical firm Croda saw profits surge 90% and raised dividends by 25% for the half year as it experienced good sales in both of its divisions.

Imperial Leather soaps maker PZ Cussons served up a 12% rise in full year pre-tax profit, ahead of forecasts, after strong trading across all regions, especially Nigeria.

Bluetooth specialist CSR slumped into losses for the half year and said this year’s financial performance will be framed by the difficult economic environment.

Car retailer Inchape saw profits rise 4.4% for the half year and expects to trade in line for the year as it contends with the challenging environment in its markets.

Imperial Leather soaps maker PZ Cussons served up a 12% rise in full year pre-tax profit, ahead of forecasts, after strong trading across all regions, especially Nigeria

Shares in Scottish semiconductors firm Wolfson Microelectronics fell after it said third quarter revenues are expected to be in the range of $56m - $62m amid uncertain economic conditions.

Another Scottish firm, AG Barr, is vulnerable to competition, McCall, Aitken and McKenzie said as it lowered its rating on the Glasgow-based soft drinks producer to ‘reduce’ from ‘hold’.

Sales have fallen 3.1% during the 25 weeks to 26 July at troubled high street chain Woolworths and by 6.7% on a like for like basis in the six weeks since its last update in June.

Shares in Bateman slumped after the engineer said operating profit will be lower than previously expected due to revision of certain Delta-T projects, organisational changes and the weak dollar

First Artist fell after the media, entertainment and events group said it expects full-year earnings before interest, taxes, depreciation and amortization to be below current market expectations.

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