As already pointed out it should be

setb P1.2 ; You forgot the P

And a few more points :

If you are expecting to light the LED by making the port pin high, then you are sourcing - maybe the MCU can't drive the LED in this fashion. Always the port pins have better sinking capabilities than sourcing.

And just typing END does not stop the processor - use an instruction like 'JMP $' - this will cause the MCU to hang at that instruction till reset.

Raghu