LONDON (ShareCast) - Leading shares are predominantly higher but oils fail to participate in the rally while banks are decidedly mixed.

Mortgage lender HBOS continues to slide on fears that the takeover offer from Lloyds TSB will either be renegotiated or rejected by the Lloyds TSB shareholders. Lloyds TSB, in contrast, is higher today.

A statement by Royal Bank of Scotland to alleviate fears about its exposure to the fall-out from the Fortis rescue may have succeeded in its aim, but the stock is still lower as investors threat about the UK banking industry. Standard Chartered and HSBC, with their wider geographical spread, make headway, however.

Tesco’s results met expectations with a 10.3% rise in first-half pre-tax profits despite the tough retail environment. Underlying pre-tax profit rose to £1,453m in the 26 weeks ended 23 August with sales, including VAT, up by 14.1% to £28.1bn. The interim dividend was hoisted by 11.6%.

Pub group shareholders raise a glass to Enterprise Inns, which said dividends will be in line with market expectations despite a forecast fall in underlying earnings of 3% for the full year. Punch Taverns, Whitbread and Mitchells & Butlers have rallied in sympathy, but smaller rival Pubs 'n' Bars is weaker after warning that factors like the smoking ban and cheap supermarket alcohol are expected to hamper its second half performance.

Oil groups are lower on the slide in the crude price overnight, with BP, Wood Group and Royal Dutch Shellleading the way down.

Computer games retailer Game Group reported a better-than-expected first half performance and raised its guidance for full year like-for-like sales from 5-10% to 8-12%.

Plumbing supplies distributor BSS anticipates that revenues and earnings for the first half will be in line with expectations, with positive like for like growth, despite the more uncertain economic environment. The group's financial position remains strong and there have been no material event or transaction in the period.

Bus and train revenue growth has continued strong at FirstGroup in the half year to September. "With excellent prospects for growth in all our markets the outlook remains positive," it said.

Shares in FirstGroup were also given a boost by a note from Collins Stewart retaining its ‘buy’ recommendation on the bus and train operator.

KBC Peel Hunt has lowered its recommendation on Dawnay, Day Treveria (DDT) to ‘reduce’ from ‘hold’ after the German property group’s interim results.

Finncap has lowered its rating on cheese and butter maker Dairy Crest to ‘hold’ from ‘buy’, citing the squeeze of higher input costs and weak economic conditions.

Defence and security company QinetiQ has completed its restructuring of its Europe, Middle East and Asia operations ahead of plan and under budget. In a pre-close trading update the board confirmed that the company continues to perform in line with expectations.

Domino’s Pizza is wanted ahead of a third quarter trading update tomorrow which may see internet based orders rise above 25% for the first time.

Electric vehicle specialist Tanfield powered forward after saying that despite posting a half-year loss there will be no need for any fund raising.

Joinery group Galiform is firmer, having clarified its exposure to the rescue programme of kitchen group MFI. Galiform is the guarantor of the rent and associated costs payable under the leases of 46 properties occupied by the MFI Retail operations, and faces a possible bill of over £23m per year if MFI shuts down 100 of its branches

Exploration and production firm Heritage Oil confirmed that talks regarding the possible sale of certain assets have been terminated.

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