Oil slipping below 114 US dollars a barrel at one stage boosted blue chips in late session trading, leaving the FTSE 100 Index 11.7 points higher at 5489.2.

Weaker mining stocks and a broker downgrade for mobile phone giant Vodafone had dragged on the London market earlier in the day, despite cheer after lower-than-feared losses from Royal Bank of Scotland.

Lower oil prices also sent stocks on Wall Street soaring, with the Dow Jones Industrial Average up two per cent in early trade.

Grim results from US mortgage giant Fannie Mae, whose second-quarter losses were more than triple expectations, failed to halt the crude-inspired rally.

In London, NatWest parent RBS rose 71/2p to 2401/2p after fears of £1bn-plus losses were not realised in its interim results. It reported a half-year deficit of £691m and said it was comfortable with its balance sheet position.

The rest of the sector was mixed, with Barclays off 81/2p to 3661/2p after its own results on Thursday, while HBoS fell 31/4p to 3311/2p, Lloyds TSB fell 3/4p to 318p and HSBC climbed 16p to stand at 8581/2p.

But it was travel firms and airlines that stole the show, with the sight of oil prices below 114 US dollars pushing Thomas Cook and British Airways to the top of the risers board with gains of 17p to 2373/4p and 203/4p to 2753/4p respectively. TUI Travel lifted 17p to 2371/2p.

Lower metal prices amid expectations of weaker economy activity meant miners dominated the fallers board, with Kazakhmys the biggest FTSE 100 loser, off six per cent or 86p to 1248p.

BG Group bucked the downward commodities trend for a while after announcing a further crude oil discovery off the coast of Brazil. But excitement over BG's sixth success at the deep-water Santos basin started to fade and shares lost their earlier two per cent gain to finish the day 16p lower at 1090p.

Meanwhile, Vodafone managed to shrug off a broker downgrade, which had at one point caused the group to fall more than one per cent.

Goldman Sachs downgraded the stock to neutral from buy and said it was concerned about weaker revenue growth in Europe, but Vodafone closed up 1p at 1401/4p.

An upgrade from Goldman for Marks & Spencer supplier Northern Foods caused the company's share price to lift nine per cent or 43/4p to stand at 60p.

H Samuel and Ernest Jones jeweller Signet, also in the FTSE 250, enjoyed a second day of gains after an upgrade from Dresdner Kleinwort following reassurance on Thursday over US margins. Shares rose seven per cent, or 4p, to 591/4p.

The second tier risers board also featured a number of pub chains as investors returned to the sector following heavy falls in recent weeks. Punch Taverns enjoyed a gain of seven per cent, or 231/2p, to 3583/4p, while Mitchells & Butlers gained 22p to 318p.

The biggest Footsie riser was British Airways up 203/4p to stand at 2753/4p.