The FTSE 100 Index is up 27.10 points, or 0.5%, to 5,860 points this morning, led by takeover activity.
Supermarkets group Morrison has climbed 1.16% to 196.75p after a Sunday newspaper reported a private equity consortium of Texas Pacific, CVC and Permira is considering a £6bn bid for the group.
Bid speculation has also lifted financial software company Misys up 6.28% to 228.50p.
BAE is the top faller, down 3.11% to 358.25p, after the company said Rothschild had set a price of 2.75bn euros for a 20% stake in planemaker Airbus. This was below the 5bn euros estimated by recent media reports.
In Japan, the Nikkei 225 Stock Average added 66.44 points, or 0.4%, to 15,571.62 points after the Bank of Japan's Tankan survey of business confidence showed manufacturers plan to increase investment at the fastest pace in almost 16 years.
Sumitomo Mitsui climbed 20,000 yen, or 1.7%, to 1.23m, Resona Holdings jumped 16,000 yen, or 4.4%, to 377,000 and Komatsu added 50 yen, or 2.2%, to 2,325.
Aeon, Japan's largest retailer, rose 60 yen, or 2.4%, to 2,570, Fast Retailing gained 210 yen, or 2.3%, to 9,560 and Isetan advanced 49 yen, or 2.5%, to 1,999.
Meanwhile, Japan Airlines dropped 13 yen, or 4.6%, to 273 - the biggest one-day tumble since 17 November 2003 - after it said it will offer 700m new shares and may sell an additional 50m if there is demand.
In the US, the Dow Jones industrial average fell 40.58 points, or 0.36%, to close at 11,150.22 points on Friday after weaker-than-expected data on Chicago-area manufacturing stirred concerns about the economy.
Apple shares fell 2.9%, or $1.70, to $57.27 after the company said on Thursday an internal probe had uncovered irregularities related to issuance of stock option grants between 1997 and 2001.
KLA-Tencor fell 1%, or 42 cents, to $41.57 after it said the preliminary results of an internal investigation showed some discrepancy in the dating of stock option grants.
Meanwhile, General Motors jumped 8.6%, or $2.35, to $29.79 after news one of the blue-chip company's largest investors is urging the automaker to consider a partnership with Nissan and Renault.IFAonline
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