Rights issue worries put Rio Tinto in the spotlight

Although Rio has sworn to reduce its debt mountain, mightily swollen by the $38billion (£25.7billion) acquisition of Alcan, through asset sales and cost-cutting, it is running out of time.

However, some relief arrived today as it emerged it is in talks that could see it hive off part of its Alcan packaging business, said to be worth $5billion, to Amcor, the world's largest maker of plastic drinks bottles.

Rio climbed 29p to 1866p and other miners benefited from the thought of a fresh round of consolidation triggered by fire sales.

Vedanta rose 10p to 624p, while Kazakhmys was 9p higher at 295.5p, lifted by an upgrade from Cazenove.

The miners helped shares move tentatively forward, with the FTSE 100 up 30.5 points at 4259.43.

Despite this, volumes were light with many investors holding off until publication of America's crucial unemployment figures - the non-farm payrolls - due later today.

A fortnight's sunshine could either be seen as a vital antidote to the gloomy outlook or an easy way for households to slash an unnecessary item from straitened budgets.

Package holiday operator Tui's optimistic outlook has not convinced everyone.

Despite revealing that the fall in bookings for 2009 has not exceed the number of holidays cut, Citigroup has gone cold on Tui.

It has shunted the group, which merged with First Choice last year, down to hold from buy and trimmed its target to 230p from 240p on the back of the deteriorating environment.

But despite its caution, it concedes there is potential for improving margins if Tui, down 4.5p at 238p, can renegotiate accommodation contracts and cut even more capacity.

It prefers Thomas Cook, keeping it at buy although it has lopped the target to 280p from 305p.

BG rose 14p to 1062p as investors bought into its growth prospects. Deutsche Bank upgraded it to buy from hold and in a gushing note to clients claimed: "These were truly excellent results!" Deutsche's Lucas Herrmann is particularly impressed by growth opportunities in Brazil and Australia and has upped his target to 1175 from 1075p.

Stockbroker Evolution Group rose 8p to 101p as it released a surprisingly upbeat pre-close trading statement.

While profits for the year just gone will not disappoint the market, business in January has been notably robust and above expectations for 2009.

Evolution also announced that the value of client assets it gained when it took over the stockbroking arm of Kaupthing Singer & Friedlander at the end of 2008 was £1.1billion - far more than it had initially calculated.

But boss Alex Snow reminded shareholders that the uncertain outlook means significant challenges ahead.

Investors in New York appeared happy to shrug off a big rise in jobless claims, which now top 626,000, and a drop in manufacturing orders, with the Dow rallying from opening falls to close up 106.41 at 8063.07.

They chose to focus on speculation that the government will relax rules on mark-to-market accounting rules for illiquid assets. This led to a sharp turnaround in the financial sector.

The only casualty was again Bank of America - down almost 20 per cent, at one stage before reducing the deficit to just 1 per cent.

Fears of full nationalisation continue to haunt the shares following big losses from Merrill Lynch, which it took over in the autumn.

In Tokyo, leading shares benefited from a weaker yen, which lifted exporters such as Canon, and the change of fortunes in New York overnight. The Nikkei 225 Average ended 126.97 points higher at 8076.62.

Hong Kong shares rose for a third day running as investors continued to buy up blue-chip stocks on hopes that a massive stimulus plan would pass muster at the US Senate.

The Hang Seng index closed up 476.14 points at 13,655.04.