LONDON FTSE 100 CLOSE 5,095.6 -40.6

THE London market rung up its third straight day of losses yesterday as weakness in the mining sector offset improved sentiment for banking shares.

British Energy was near the top of the leaders' board as French power giant EDF upped its takeover offer for the East Kilbride- based group to 774p-a-share or GBP 12.5 billion. BE ended the day with gains of 41p, or nearly 5 per cent, at 765p.

However, the nuclear power generator was pipped to the top spot by London Stock Exchange, which said it was taking steps to improve competitiveness. As a result shares in the LSE closed up more than 7 per cent, or 58.5p, at 882.5p.

British and Scottish Gas parent Centrica, in talks over taking a 25 per cent stake in BE, also carved out slim gains despite turning ex-dividend - meaning shareholders are not entitled to the latest payout. The shares nudged up 0.5p to 331p.

Despite uncertainty over the US government's banking bail-out plans, traders took some cheer from news of billionaire Warren Buffett's dollars 5 billion (GBP 2.7bn) investment in Goldman Sachs.

That helped several financial stocks make steady progress, with HBOS up 0.3p to 180.5p, and Royal Bank of Scotland 6.75p, or 3.3 per cent, ahead at 210p. HBOS suitor Lloyds TSB added 5.25p to 267p.

Barclays was the exception, off 11.75p at 345.5p, after buy-to- let specialist Bradford & Bingley announced the bank was acting as interest rate swap provider for its covered bond programme.

B&B, which on Tuesday renegotiated the terms of an onerous deal under which it buys mortgages from US financial services firm GMAC, added 0.25p to 25p.

The benchmark FTSE 100 index ended the session 40.6 points, or 0.8 per cent, weaker at 5,095.6, compounding Tuesday's 1.9 per cent drop.

CMC Markets dealer Jimmy Yates said: "It seems to be turning out to be something of a waiting game once again as traders look across the Atlantic for further clarity of the Fed's bail-out plans before committing to any bold moves in the market.

"Declining metals prices are continuing to weigh on the mining sector."

In the top flight, technology group Smiths fell back despite unveiling healthy annual results and a GBP 225 million contracts boost from the US military. Shares ended the day down 3p at 1016p.

Lambert & Butler maker Imperial Tobacco, meanwhile, added 60p to 1,818p, as the group assured on its financing and said it had made "very good progress" with the integration of Spanish acquisition Altadis.

But mining firm Vedanta Resources was the second-biggest faller after the group shelved restructuring plans due to recent financial market turmoil. Shares lost 103p to 1,424p, a fall of more than 6 per cent. Its losses came amid softer metals prices. Anglo American and Xstrata - down 128p to 2,008p and 118p to 2,117p respectively - were also prominent fallers.

DOW JONES 10,825.17 -29.00

US SHARES closed mixed last night, with the Nasdaq up more than 2 per cent, as investors bet a dollars 700 billion financial-sector bailout might free up money for tech spending.

The broader market also got a brief lift from reports suggesting the Bush administration might accept curbs on executive pay as a condition for passage of the bailout. However, CNBC television reported no such deal had been reached.

Earlier, Federal Reserve chairman Ben Bernanke urged Congress to approve the bailout plan, saying continued strains in bank lending would hurt households and businesses and further weaken the economy. The Dow Jones industrial average closed down 29.00 points, or 0.27 per cent, at 10,825.17. The Standard & Poor's 500 index fell 2.23 points, or 0.19 per cent, at 1,185.99 but the Nasdaq Composite index was up 2.35 points, or 0.11 per cent, at 2,155.68.

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