Bid talk was enough to push Lonmin against a falling stock market tide yesterday, keeping the South Africa-focused platinum miner’s revival on course. Yesterday its shares rose 131p to £26.62 amid talk of a £34.50 bid from Xstrata, down 107p at £34.23. Xstrata, whose main assets are copper and coal, has long been seen as a contender for Lonmin, particularly after its merger talks with Vale, of Brazil, ended fruitlessly in March.

However, some traders put Lonmin’s gains down to a trading statement from Johnson Matthey, the platinum distributor, up 70p to £17.38, which said that sales of vehicle catalytic converters, which use the metal, were well ahead as Asian demand was making up for a slump in the United States.

Lonmin has fallen 21 per cent since June amid worries that falling US car sales would hit demand, but last week Evolution upgraded Lonmin to a “buy” with a £35 price target, saying that supply problems meant there would still be a shortage this year.

The FTSE 100 closed down 40.2 points at 5,364.1 as rising oil stocks were unable to compensate for another sell-off in the mining and banking sectors and gloomy trading statements from Vodafone, down 20¼p to 129p, and Enterprise Inns, off 46¼p to 299½p. Vodafone blaming the economic downtown for falling demand took a toll on telecoms stocks, until now seen as relatively resilient to the credit crunch. Carphone Warehousefell 11.15p to 190.6p and BT lost 7¼p to 198p.

Enterprise said that beer sales were falling, but failed to quantify the slump, and it also said that it was having to cut rents for tenants. That took 25¼p off Punch Taverns, which closed at 240p.

Barclays slipped 9¼p to 314¾p ahead of what are widely expected to be gloomy figures and after news of a profits slump from American Express, its rival credit card group.

Fears that Tropical Storm Dolly in the Gulf of Mexico would hit oil production helped stocks without exposure there, such as Cairn Energy, up 161p to £27.44.

Cadbury rose 83p to £18.08 as Dresdner Kleinwort said that a bid from Kraft was still credible and raised its rating to “hold” ahead of what it said would be resilient first-half results next week. J Sainsbury rose 13¾p to 310p as Robert Tchenguiz, the property entrepreneur, increased his stake from 6 per cent to nearly 7 per cent and converted his derivatives to ordinary shares.

Ferrexpo fell 15p to 275½p after it highlighted cost inflation in Ukraine of 25 per cent. Cadogan Petroleum, the Ukrainian oil explorer, unsettled traders by suspending its shares at 147½p while it investigates reports that a court had questioned the validity of its exploration licences in the country.

AstraZeneca rose 35p to £23.24 amid hopes that its Crestor cholesterol drug would benefit from poor trial results from Merck’s rival Vytorin.

Imperial Energy rose 40p to £10.84 amid talk that a second bidder such as ENRC, down 17p at £10.48, may trump the £12.90 offer from ONGC, of India. New York: Shares ended sharply higher as oil prices fell by more than $3 a barrel, taking the edge off disappointing earnings from American Express and a weak outlook from Apple. The Dow Jones industrial average closed up 135.20 at 11,602.50.

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