Banks move up as market dithers

The FTSE 100 Index has closed up 9.3 points at 5302.5, hit by thin trading and a lack of corporate news.

The official declaration of a recession in the US didn't help, as the Dow Jones Industrial Average in the States fell back by 40 points.

In London, BP shed 3%, dropping 17½p to 512½p as hopes of price-boosting oil production cuts were once more diminished.

A smaller-than-expected offer from Russia also saw Shell slip back 4½p to 488½p, while Enterprise Oil was seemingly unaffected, up 3p at 454p.

A stronger performance from the banking sector, however, boosted spirits with investors circling another possible acquisition target.

Weekend speculation that Lloyds TSB and Barclays may be lining up a bid for Standard Chartered saw its shares surge 6% or 49½p to 872p.

The move came despite the bank, which has a major presence in Asia, stating it had "never been and is not in any discussions regarding the sale of the company".

Investors nevertheless pushed Standard to the top of the Footsie risers board while Lloyds rose 5p to 750p and Barclays climbed 40p to £21.90.

Royal Bank of Scotland also rose, up 11p at £16.79 while HSBC edged up 3p to 860p. Recently merged HBOS slipped 15½p to 829p.

Tech stocks fared well following the Nasdaq's surge on Friday with Arm 13p higher at 404p and Sage up 5½p at 253p.

Granada and Carlton also rose after the government paved the way for merger by announcing plans to scrap rules which limit ownership. Granada climbed 3¾p to 145p while Carlton closed 5¼p higher at 236p.