UK Market News

LONDON (ShareCast) - A late swoon saw Footsie (news) relinquish virtually all of its gains, with losses on resource stocks counter-balancing gains made by banks.

Barclays (LSE: BARC.L - news) , Royal Bank of Scotland (LSE: RBS.L - news) , HSBC (LSE: HSBA.L - news) and Lloyds Banking (LSE: LLOY.L - news) were the pick of the banking sector, despite chancellor Alistair Darling firing a warning about the re-emergence of the bonus culture in banking circles.

Insurers were mixed, with higher while insurers such as Aviva (LSE: AV.L - news) and Legal & General (3166.KL - news) on the up while Old Mutual (LSE: OML.L - news) and Standard Life (LSE: SL.L - news) fell back.

Friends Provident was the day's big faller after demerger of its 52% stake in F&C Asset Management went through..

Media stocks got a lift from Credit Suisse, which has upgraded the European media sector to "overweight". Publishers Reed Elsevier (Amsterdam: 273044.AS - news) and Pearson (LSE: PSON.L - news) plus pay-TV provider BSkyB (LSE: BSY.L - news) all headed higher.

British Airways (LSE: BAY.L - news) was flying high despite another year-on-year slide in passenger figures. Investors reacted positively to the announcement of a new business plan for the airline. Capacity for the current summer period is now expected to be down 3.5% (previously 2.5%), with capacity in the winter down 5% (previously 4%). FTSe 100 was up 2 at 4,236.

BHP Billiton (LSE: BLT.L - news) has agreed to sell its Yabulu nickel refinery for an undisclosed sum after writing down its value by US$675m.

Engineer and construction contractor Balfour Beatty (LSE: BBY.L - news) was lower after a trading update. The company has traded in line with expectations since its previous update in May. It attributed the steadiness of the ship to continued infrastructure spending by customers, acquisitions and tight control of costs.

Oil and gas firm Salamander has spudded the Phu Kheng-1 exploration well in Block L27/43, Northeast Thailand. "Phu Kheng-1 has the potential to open up a new play in the Khorat basin," said chief executive James Menzies.

Ireland's premier bank, Bank of Ireland (Dublin: BIR.IR - news) , has warned it is facing a squeeze on profit margins in addition to the huge impairment charges it will take this year and next. "Demand for new lending remains muted and the lower interest rate environment together with the impact on deposit pricing of more intense competition has resulted in pressure on liability spreads," it said in a trading update.

Irish building supplies firm Grafton said the recent tough conditions have impacted its profitability "severely", with revenues down 31% in the first half of the year.

Five-a-side football pitch operator Goals Soccer continues to trade in line with expectations despite severe snow in February, which reduced interim sales and profits by approximately £300,000 in the six months to June.

European Islamic Investment Bank (EIIB), the Sharia compliant investment bank, responded to the recent surge in its share price and admitted that it had received approaches. "The board of EIIB notes the recent movement in its share price and announces that it has received a number of preliminary approaches from third parties," said the group EIIB's share price has surged 40% in the last two days.

IT services firm Morse (LSE: MOR.L - news) was top of the TechMark charts. Revenue and adjusted earnings before interest and tax (EBIT) will be towards the upper end of analyst expectations for the year, it said.

Shares in Bglobal (LSE: BGBL.L - news) rallied on news that the energy meter provider secured £15m of financing from Barclays Asset & Sales Finance to fund a further roll-out of its products. Bglobal said Barclays made the money available through a third party to provide ongoing lease finance arrangements to customers buying the group's smart meter services.

Electronic payment and loyalty card provider Universe Group (LSE: UNG.L - news) said operating profits will be down on expectations because of lower sales forecast.

Cybit, a provider of vehicle and maritime tracking systems, raced to a seven-month high as investors welcomed a 27% surge in full-year profit and optimistic outlook.

FTSE 100 - Risers British Airways (BAY) 125.50p +5.46% Reed Elsevier (REL) 457.25p +3.92% Barclays (BARC) 297.00p +2.77% Lloyds Banking Group (LLOY) 67.50p +2.43%

FTSE 100 - Fallers Friends Provident Group (FP.) 63.51p -6.73% Land Securities Group (LAND) 443.50p -3.90% Old Mutual (OML) 82.62p -3.39% Fresnillo (LSE: FRES.L - news) (FRES) 500.50p -2.63%