LONDON (ShareCast) - London’s top stocks are holding on to gains Monday afternoon despite heavy losses in the mining sector.

Building supplies group Wolseley is leading the risers, closely followed by International Power, which jumped after a business in which it holds a 40.5% interest has signed a 30-year Power Purchase Agreement (PPA) for the new 815MW, coal-fired Paiton 3 plant in Indonesia.

HSBC said the first half of 2008 saw the most difficult financial markets for several decades as the banking giant reported a 28% fall in profit. Loan impairment charges and other credit risk provisions were $10.1bn, $3.7bn more than in the first half of 2007.

The group also said it is still in talks with US private equity firm Lone Star about how to take forward a deal to buy 51% of Korea Exchange Bank, the banking giant said Monday.

With the price of a barrel of crude moving above $125 a barrel, Shell and BG Group post strong gains. The higher oil price has fuel-guzzler British Airways on the back foot though.

Russia-focused oil firm Sibir said in response to recent press reports of a possible asset-swap deal with Shell that it discusses various opportunities with different companies on a regular basis, including Shell.

Miners are leading the decline with Ferrexpo , Kazakhmys, Anglo American, Xstrata and Eurasian Natural Resources down. Copper, platinum and other metal prices fell back.

Elsewhere in the mining sector, Rio Tinto is to contribute $341m to the cost of continued pre-feasibility studies on a large, tier-one copper deposit at its Resolution Copper Mining operation in Superior, Arizona.

Centrica confirmed it is in talks with a third party with a view to taking a minority stake in British Energy and has not ruled out a possible merger with the UK nuclear group.

The British gas-owner said it would take a stake in British Energy if the third party, believed to be French utility EDF, succeeds with an offer for British Energy.

HSBC has upgraded its rating on Severn Trent to ‘overweight’ from ‘neutral’ saying the water group has drawn a line under recent regulatory problems.

JP Morgan has raised its target price on BAE to 540p from 520p following the defence systems group’s strong first half results. Keeping its ‘overweight’ rating on the stock, JPM said it has a positive view of BAE’s US business.

Russia-focused oil producer Imperial Energy admitted that it has received another approach that could lead to an offer. Imperial's statement comes after press speculation suggested that another suitor, rumoured to be Chinese firm Sinopec, could table a rival offer. "In response to further press speculation, the board of Imperial confirms that it has received another approach in relation to a possible cash offer for the company," said Imperial.

Software firm Sage said results for the 9-month period were consistent with management expectations and expects full year figures to be in line with forecasts. The group said its UK business reported solid performance despite the uncertain market conditions, while North America, excluding Sage Healthcare Division, reported a satisfactory performance in a challenging environment. In more benign economic conditions, the group said its businesses in Mainland Europe continued to perform strongly.

HSBC has upgraded its rating on Severn Trent to ‘overweight’ from ‘neutral’ saying the water group has drawn a line under recent regulatory problems.

JP Morgan has raised its target price on BAE to 540p from 520p following the defence systems group’s strong first half results.

HSBC has downgraded its rating on Homebase and Argos owner Home Retail Group to ‘underweight’ from ‘neutral’ and cut its target price to 205p from 240p.

Construction and regeneration group Morgan Sindall saw interim pre-tax profit increase 13% despite challenging market conditions, as the group benefited from acquisitions made in 2007. “Despite challenging market conditions, we have delivered a record set of interim results. We remain on track to deliver record results for this year in line with our expectations,” said the group.

Defence firm Ultra Electronics saw half year profit before tax and amortisation jump 16% to £30.4m, leaving it confident of making further progress. Revenue was 20% higher at £231.9m, with the Tactical & Sonar Systems unit contributing £107m, up nearly 31%. Operating profit at the division grew over 36% to £13.9m, with group operating profit up 20% to £32.5m.

Online gaming group 888 Holdings saw second quarter operating income rise 36% to $69m, while net gaming revenue increased 33% to $67m. “In the first three weeks of July we experienced stronger Poker trading and significant growth in both our Bingo and Sportsbook businesses. Our various strategic initiatives are progressing well and given the good start to the third quarter and our clear business strategy we are confident of delivering future growth during 2008,” said chief executive Gigi Levy.

Testing and inspections company Intertek reported a 20.9% increase in first half pre-tax profit to £58.5m and said it expected to perform strongly in the remainder of the year.

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