The FTSE 100 index closed up 1.12% at 5,787 points, its highest level since June 2001, led by M&A activity and an upbeat start on Wall Street.
The biggest riser amongst the London blue chips was P&O, gaining 4.70% to 547p, after Dubai Ports upped its offer for the company to 520p per share cash, valuing the group at about £3.9bn. The deal has received the recommendation of the group's board in light of rival bidder PSA’s 470p per share offer.
Mining heavyweights were still in the blue after posting big gains in Australia overnight on high hopes for metal prices going forward. BHP Billiton rose 1.20% to 1,052p, Xstrata gained 2.12% to 1,635p and Anglo American rose 3.11% to 2,187p.
Oil stocks also chipped in, with BP and Royal Dutch Shell looking good as US March crude trades up almost a dollar at $67.20 a barrel. BP rose 1.68% to 665p, while Shell gained 1.66% to 1,960p.
Corus was also 14.74% higher at 72p after news ThyssenKrupp has agreed to buy Dofasco from Arcelor if Mittal Steel’s bid for Arcelor progresses as planned.
In the US, the Dow Jones Industrial Average has risen 46.35, or 0.4%, to 10,855.82 as higher-than-expected profit forecasts from Microsoft and Procter & Gamble overshadowed a government report showing the weakest economic growth since 2002.
Microsoft has risen 84 cents, or 3.2%, to $27.34 for the best performance in the Dow average. The software maker says per-share earnings this quarter will be 32 cents to 33 cents on revenue of $10.9bn to $11.2bn as it benefits from new product releases such as the SQL server and Xbox 360 video-game console.
P&G, the largest US household goods maker, has risen 63 cents to $59.45. Profit will increase to $2.58 to $2.62 a share this year, the company says, compared with the prior forecast of $2.54 to $2.60.
Broadcom has soared $11.55, or 20%, to $70.27 after it said fourth-quarter profit, excluding some items, is 50 cents a share, beating the analyst estimate of 44 cents in a Thomson survey.
US Steel has also increased $2.05 to $58.32, while Nucor has added $3.77 to $84.19.
But Avid Technology has plunged $6.78 to $47.05. The maker of sound- and video-editing equipment and software said yesterday it had fourth-quarter profit, excluding some items, of 69 cents a share. Analysts expected 72 cents in a Thomson survey.
Emulex has also lost $1.51 to $19.40. The maker of computer chips and cards used in data-storage machines says fiscal second-quarter profit, excluding some items, is 28 cents a share, missing the average analyst estimate by 1 cent.IFAonline
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