Oil groups made up the biggest gainers of the day, as London market shrugged off an indifferent start after Wall Street opened higher.
The crude price edged up towards $75 a barrel on fears that hurricanes in the Atlantic could hit oil supplies, with analysts saying Opec is unlikely to decide on production increases when it meets next week. So BP added 10.5p to 561p while Royal Dutch Shell rose 58p to £19.79. Shell was also helped by analysts at UBS moving their recommendation from neutral to buy.
Still with oil, exploration group Soco soared 148p to £21.65. The company announced a rise in half-year profits from $15m to $17m and said it was confident a prospect in Vietnam would yield recoverable reserves of at least 1bn barrels of oil equivalent.
Tullow Oil was also wanted, up 34p to 547p after an upbeat outlook statement about its potential reserves.
Overall the FTSE 100 climbed 27.1 points to 6342.3, helped by a positive set of US manufacturing figures for August which gave the Dow Jones Industrial Average an early lift after Monday's Labor Day holiday.
Financials were also in the spotlight today.
Insurer Standard Life added 0.25p to 304.25p despite many investors cashing in after a 71% rise in half-year profits came in ahead of expectations.
Banks were unsettled as UBS cut a number of price and earnings targets as a result of the current credit crunch kicked off by the US sub-prime mortgage market.
"We are cutting our European bank earnings to reflect the immediate (third quarter of 2007) and longer-term (2008) implications of the financial crisis we are currently 'enjoying'," said UBS. "While we firmly expect fixed income markets to reopen in coming weeks, this will likely be at wider spreads, with less liquidity and, in certain areas, with substantially fewer players."
The bank reduced its price target for Standard Chartered from £19.20 to £18.50, prompting a 3p decline to £15.53 despite confirmation that Singapore's state investment company Temasek had raised its stake from 15% to 16%.
Bradford & Bingley fell 2p to 382.75p as UBS cut from 555p to 525p, while Alliance & Leicester lost 2p to £10.58.
A&L issued a statement outlining its exposure to structured investment vehicles and other off balance sheet portfolios, but said the credit market turmoil would not have an impact on its profits or growth prospects.
Analysts at Keefe, Bruyette & Woods said: "It seems a little strange to us that A&L would choose to give this information where others have been less than forthcoming. This could be A&L trying to be whiter than white, but it may raise a few eyebrows over the conduct of the treasury (wholesale) division in what is essentially a mortgage bank.
"However, it does conclude by saying that its current positions and the current market liquidity issues have had no material impact on profits or growth. We may see a little relative weakness. The positive is, it may encourage others to provide the same detailed exposure."
But the biggest faller in the FTSE 100 was Northern Rock, which is heavily relient on the wholesale money market. It lost 9p to 732p as the three month Libor - the rate at which banks lend to each other - moved ever higher. Some analysts believe Northern Rock may issue a profit warning.
Again, UBS cut its price target, down from 880p to 805p.
Elsewhere Drax, owner of Europe's biggest coal-fired power station, climbed 11p to 676.5p after Citigroup moved its recommendation from sell to hold, with a 652p target price.
However the bank warned: "If coal prices don't moderate, or electricity prices increase, the risk to valuation is firmly to the downside."
Miner Kazakhmys was 34p better at £13.33 after it announced a 22% rise in half-year profits and a $700m return to shareholders via a buyback and special dividend.
But property stocks were weaker after shopping centre specialist Hammerson warned of trickier retail conditions, and JP Morgan cut its price targets for a number of companies. So despite a 9% rise in first half asset value, Hammerson fell 7p to £13.27. Rival Liberty International lost 14p to £11.83 as JP Morgan reduced its target from £13.75 to £11.50.
Among the mid-caps, cake and bread retailer Greggs lost 236p to £50.50 on fears that rising wheat prices would hit its profits.
Brit Insurance fell 10p to 344p after posting flat first-half profits and issuing a cautious forecast. Evolution Securities advised investors to reduce their holdings, saying the UK commercial market where Brit is heavily involved could take 12 to 18 months to turn around.
And Carphone Warehouse fell 1p to 356.5p as BSkyB confirmed it planned a standalone broadband product, which could provide further competition for the company.
But Collins Stewart said: "This is a buying opportunity in our view rather than a selling one. We believe investor concerns surrounding its business models are overdone and we anticipate a rapid move to profitability in the telecom arm as unbundling continues apace."
Media group SMG fell 8.25p to 37.25p on talk Goldman Sachs was placing around 42m shares at 40.5p each.
A couple of bid approaches lower down the market caused a bit of excitement.
Computer games group SCi Entertainment jumped 44.5p to 384p on news of an approach, while a possible cash offer for drug testing specialist Cozart saw its shares jump 10.75p to 51.5p.
But property minnow Erinaceous - which recently revealed takeover talks had fallen through - lost 10.75p to 110.5p. The company, whose results are due out on 25 September, has been a target for short sellers in the past but traders believe most of these are now out of the stock.
Finally marketing services group Media Square -which last year rejected a £45m bid believed to have come from 7% shareholder, the investment vehicle Promethean - dropped 2.625p to 6.125p today after a profit warning.