The FTSE 100 Index has climbed 27.3 points, or 0.5%, to 6026.7 points this morning led by insurers Prudential and Legal & General.
Prudential has risen 12% to 753p after it rejected an approach from larger rival Aviva. Aviva shares gained 2.2% to 869.5p.
Legal & General has advanced 4.5% to 150p. The insurer is extending gains for a second day after saying 2005 profit more than doubled.
Anglo American has also climbed 3.2% to 2,101p on news Stora Enso Oyj, the largest paper maker, is considering a £4.5bn bid for Anglo's Mondi paper and packaging unit.
In Japan, the Nikkei 225 Stock Average climbed 285.07 points, or 1.7%, to 16,624.80 points led by brokerages and banks.
Nomura Holdings gained 90 yen, or 3.6%, to 2,585. The company said earlier this month it will pay investors 36 yen a share for the second half, more than triple the 10 yen it paid a year ago.
Marusan Securities surged 300 yen, or 16%, to 2,205. The brokerage extended gains of 17% and 14% after saying it plans to pay a full-year dividend of 110 yen, including a 50 yen special dividend.
Among banks, Mitsubishi UFJ rose 20,000 yen, or 1.2%, to 1.69m, Sumitomo Mitsui Financial Group gained 40,000 yen, or 3.3%, to 1.25m and Resona Holdings added 6,000 yen, or 1.6%, to 385,000.
In the US, the Dow Jones industrial average ended up 26.41 points, or 0.23%, at 11,279.65 points on Friday as investors bought shares of industrial companies like Caterpillar and United Technologies after a government report signaled strength in the sector.
Caterpillar rose 1.8%, or $1.33, to $76.23, while shares of United Technologies gained 1%, or 57 cents, to $58.80.
But General Motors slid 4.9%, or $1.09, to $21.13 after it reported its 2005 loss was $2bn deeper than previously reported.
Shares of AIG, the world's largest insurer by market value, fell 0.6%, or 42 cents, to $68.82 after the company posted a 72% drop in fourth-quarter profit.IFAonline
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