FTSE: 6,001.20 (+81.22) Mid-250: 11,608.97 (+199.23) Small Cap: 3,237.16 (+18.79)SHARES IN London moved higher yesterday as an overnight fall in oil prices helped ease concerns that high fuel costs could derail an economic recovery.

Investors were encouraged back into the banking sector, in spite of sharp opening losses for Lloyds Banking after the part-nationalised bank reported rising impairment charges due to its exposure to the Irish banking crisis and disappointment on its guidance for 2011 margins.

“Although at a headline level, these results were above expectations, it is the mix of the earnings and the outlook that has caused some disappointment,” said Jonathan Jackson, head of equities at Killik.

Shares in Lloyds fell 4.6 per cent to 62.77p, but the rest of the sector rallied following several sessions of losses.

HSBC rose 2.4 per cent to 711.1p, while Standard Chartered added 1.8 per cent to £16.26½. Even Royal Bank of Scotland, which was lower for much of the session, edged 0.1 per cent higher to 45.65p.

London Stock Exchange, which was inactive for most of the morning after it had to halt trading just a few minutes into the session because of “system issues”, resumed at 12.15pm and after a positive start on Wall Street, the FTSE 100 ended the session up 81 points at 6,001.2, a rise of 1.4 per cent.

Miners were back in favour as concerns about growth eased. Lonmin gained 4.5 per cent to £18.29 and Kazakhmys rose 2.2 per cent to $14.32.

IAG, the airline group that controls British Airways and Iberia, the former Spanish flag-carrier, fell 0.7 per cent to 224.6p after it reported lower-than-expected profit, overshadowing reassuring comments about its forward bookings and its fuel-hedging policy.

At €84 million, the group’s full-year pretax profit came in light of forecasts, but blamed bad weather in December and a strike by Spanish air traffic controllers.

Rank advanced 5.3 per cent to 131.6p. The UK entertainment and casino company posted operating profit of £75.4 million in 2010, up from £60.8 million the previous year, on revenue of £568 million.

William Hill was 4 per cent higher to 190.9p after it reported forecast-matching full-year earn-ings that nearly doubled the figure reported for 2009. – (Copyright The Financial Times Limited 2011/Bloomberg)