FTSE finds energy to bounce back

British Energy shares staged a recovery today as the London market bounced back after its first negative session in seven trading days.

The overall mood was helped by a strong session for mining stocks, while fund managers Man and Amvescap were ahead after another round of speculation.

The FTSE 100 Index reached mid-morning 29.7 points higher at 6138.3, as the market looked for a return to the five-year high seen earlier in the week.

Among the mining stocks, Rio Tinto added 61p to 2756p and Lonmin lifted 57p to 2797p.

The recovery for British Energy, following the operational difficulties reported earlier in the week, saw its shares rise 19.5p to 469.5p, a gain of more than 4%.

Legal & General joined the risers board after it said third quarter new business sales improved 36% to £1.21 billion in the first nine months of the year. Shares lifted 3.25p to 143p.

The pressure was on banking stocks, amid fears over higher interest rates and following broker notes suggesting the sector was fairly priced. HBOS led the sector lower, with a drop of 7p to 1078p, while Royal Bank of Scotland was off 9p at 1873p.

In the fund management sector, shares were lifted by continued speculation over the future of Man and Amvescap.

The pair rose 15.5p and 19.5p respectively, to 475.5p and 611p, after it was reported that Man had hired investment bankers to advise on the demerger of its brokerage business.

Retailer Next remained under pressure after a fall of almost 3% in the previous session.

The stock fell 2p to 1868p as the unseasonal weather appeared to encourage investors to take profits after a recent strong run for the stock.

Outside the top flight, transport group Stagecoach rose 4p to 139.75p, after it said full-year earnings were running ahead of management expectations.