A decent start on Wall Street following a better than expected read on consumer confidence helped London break out of a tight range mid afternoon to trade near its highs by the close with the FTSE closing up 1.3% to 5873.6.
Building materials group Hanson led the blue chips once again rising 6.18% to 730p as bid talk refused to die down, with a Dubai-based consortium said to be weighing up a bid.
The news follows recent speculation that Mexican cement firm Cemex is also lining up an offer.
Also aiding sentiment was the better than expected US housing data yesterday, which lifted the likes of plumbing supplies giant Wolseley, which added 4.11% to close at 1,139p.
The miners recovered strongly, helping to support broader gains after a positive note from Swiss broker UBS and a rise in metal prices overnight. Lonmin was up 3.61% to 2,526.00p, while Anglo American closed up3.98% to 2,142.00p.
News a US judge has granted class action status to a suit claiming tobacco firms tricked smokers into thinking light cigarettes were healthier left stocks unmoved. British American Tobacco and Imperial remained little changed.
Goldman Sachs downgraded Reuters to “neutral” from “buy” arguing that the shares are getting too close to its target adding that at current levels there is little upside left.
ABN Amro cited concerns about BT’s broadband strategy as it turned negative. The Dutch broker cut its advice to “sell” from “hold” arguing that BT’s market share looks vulnerable.
US stocks have risen for a second day after consumer confidence rebounded more than forecast, suggesting that household spending will sustain economic growth. The Dow Jones Industrial Average has climbed 61, or 0.5%, to 11,636.81 in early trading.
EBay, the world's largest Internet auctioneer, has jumped $1.04 to $27.26 after Goldman Sachs said the company is poised to improve listings and revenue growth. Consumer-related stocks including General Motors and Wal-Mart Stores have also led the advance.
General Motors has advanced 69 cents, or 2.3%, to $31.29 while Wal-Mart is up 82 cents to $49.67.
Time Warner shares have climbed 34 cents to $18.46. The world's largest media company yesterday was upgraded by Morgan Stanley who cited the cable-television and America Online units as drivers of a share price increase.
PMC-Sierra has dropped 51 cents to $6.04 after the maker of semiconductors for telecommunications equipment cut its quarterly sales forecast. Third-quarter sales will be as much as $116m, less than a previous forecast of up to $124m, the company said this morning..IFAonline
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