Lonmin, the South African platinum miner, was leading mining stocks and the FTSE 100 higher after it stuck to market consensus forecast for a 10 per cent cut in platinum production this year despite widespread fears that it would cut its targets more deeply.

It also said that it was in talks with Eskom about raising its power capacity from 90 per cent to 95 per cent.

Anglo American, which controls the rival Anglo Platinum, said that it expected the power crisis to cut platinum production drastically this year, which will only help to support the price of the metal that Lonmin does manage to produce.

Cynthia Carroll, the Anglo American chief executive, said that the power crisis could cut production from its platinum operations by 150,000 ounces in 2008.

“We’ve said publicly that the first big outage had an impact of about 30,000 ounces of platinum," she said. "We are looking at another 120,000 for the rest of the year, so 150,000 [total]. It is very, very significant.”

But Anglo American gained 2 per cent to £35.17, helped by an upgrade of the mining sector from Lehman. It raised its copper price estimates and as a result increased its earnings estimates for copper producers, including Xstrata, BHP Billiton, Rio Tinto and Anglo American.

Xstrata shares gained 76p to £40.74.

Yet further record highs in the oil price drove Tullow Oil up 2 per cent to 745p.

Fears of a rights issue and going ex dividend drove Alliance & Leicester down 9 per cent to 483p. HBOS was off 5 per cent at 494.25p and Royal Bank of Scotland fell 5 per cent to 340.75p ahead of its annual meeting with shareholders today when it will have to explain the need for its £12 billion rights issue.

Dresdner Kleinwort cut RBS to "reduce" from "hold" and its target to 310p from 500p as it gave warning that its earnings would only wither once the rights issue was out of the way

Johnson Matthey was off 4 per cent to £19.41 after UBS cut to "sell", as did Evolution.

Johnston Press, the regional newspaper group that is feared to be close to breaching covenants, was the biggest mid-cap faller, down 11.5 per cent to 121.75p as it went ex dividend.

Housebuilders were still falling after a downgrade of the sector yesterday by Merrill Lynch. Barratt Developments was down 7 per cent at 323.75p and Taylor Wimpey was down 5.3 per cent at 142.75p.

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