Lloyds TSB performs well on the FTSE

Banking group Lloyds TSB was one of the best top flight performers for a second consecutive session today as bid talk continued.

The stock added almost 2% – up 7.25p to 465.5p – as rumours circulated of interest from US bank Wells Fargo.

It was the third-highest riser on a day when the Footsie managed to rack up gains ahead of the holiday weekend, lifting 21.9 points to 5277.6.

Most eyes were on oil prices as dealers kept their fingers crossed that Hurricane Katrina would pass the Gulf of Mexico without impacting on production. The cost of a barrel of oil remained just below record highs, at $67.

Oil heavyweights BP and Royal Dutch Shell both made healthy gains on the back of the price, cheering 5p and 16p to 623p and 1842p respectively.

Lloyds TSB was beaten to the top of the blue-chip risers board by leisure group Hilton as the stock benefited from an upbeat broker note. Shares rose 5p to 309p after Barney reiterated its “buy” stance following the firm’s interim results yesterday.

But pest control group Rentokil Initial was again in the doldrums after it emerged Sir Gerry Robinson’s buy-out vehicle Raphoe Management had told the company it was not yet ready to put forward a takeover proposal.

Rentokil was the heaviest Footsie faller, down 3.25p to 159p, as broker

Dresdner also lowered its earnings forecast following half-year results yesterday.

On the corporate front, advertising giant WPP provided a boost to investors after revealing that it had claimed a greater share of its market after profits for the first six months of the year rose 32%.

Shares advanced 3p to 594.5p despite the company complaining of limited pricing power in its markets.

Outside the top flight, investors in air filtration group Domnick Hunter were buoyed by the prospect of a bid battle. Shares lifted 26.75p to 700p after Eaton Group tabled a 675p rival offer valuing the company at £242m (€356m).