FTSE 250: 5,164.30 (-3.10); FTSE SmallCap: 2,207.60 (-2.60)

London blue-chips closed higher yesterday, bolstered by gains in the banking sector, but investors used results presentations as an excuse to take profits in several stocks that have performed strongly since the March lows.

The FTSE 100 closed 0.9 per cent higher at 4,079.7, while the mid-cap FTSE 250 finished 0.1 per cent lower at 5,164.3. Volumes were healthy at 2.7 billion shares.

Royal Bank of Scotland, up 2.6 per cent at £17.44, made the largest contribution to the rise in the index, while sector peer HBOS added 1.9 per cent at 765p.

Insurers were under pressure, with Royal & Sun Alliance off 4.3 per cent at 151¼p as traders noted profit-taking across the European insurance sector. Prudential eased a further 0.8 per cent at 413p on concerns it will slash its dividend.

Reuters, which has more than doubled since March, shed 7.9 per cent at 200¾p to lead FTSE 100 fallers in the wake of the global information provider's interim results. The figures appeared promising, with operating profits at £61 million compared with a loss of £25 million from the same period a year ago, but a cautious outlook statement sparked profit-taking.

"The 14.7 per cent operating margin was better than the 12 per cent most people were expecting; more costs are coming out of the business," said Omar Sheikh of Charles Stanley.

MM0, the mobile network operator, said it added 504,000 customers in the second quarter, with a strong performance in Germany, seen by many as the weak link in its operation. But the shares slipped 1.4 per cent to 53¼p as investors focused on the outlook. Profit-taking also continued at Cable & Wireless, down 1.8 per cent at 111p after Investec reiterated its reduce rating for the telecoms operator.

ARM Holdings fell as much as 7 per cent after the chip designer reported that revenues rose for the first time in four quarters but issued a cautious outlook for the second half of the year. However, the shares recovered to close 1.3 per cent weaker at 76¾p.

Bid speculation in the house-building sector pushed Crest Nicholson up 3.9 per cent at 267p. Market gossip put Taylor Woodrow, up 2 per cent at 200p, in the frame for a bid. - (Financial Times Service)