The FTSE 100 has kept its gains, ending 14.3 points higher, or 0.27%, to 5358.60, at its close a short time ago, after bid hopes at Compass and buoyant banks helped cancel out losses at O2.
Compass was one of the days top movers, climbing 7p, or 3.68%, to 197p, after reports US private equity groups are mulling potential offers refused to die down.
The UK banking sector moved ahead in unison, with Royal Bank of Scotland climbing 1.84% to 1604p, while Northern Rock jumped 2.44% to 818p on the back of better than expected third quarter results from Credit Suisse. HBOS also improved, ending up 2.37% to 864p.
Mobile operator O2 led the fallers though, dropping 5.62% to 197.5p, after Deutsche Telekom said it would not be making a counter bid, sending the shares below the 200p level offered by Telefonica.
Royal & Sun Alliance saw early gains trimmed, ending just 0.25% higher at 100.75p after it reached a settlement with Wilmington Trust in the ongoing Student Finance litigation in the US, a dispute it has been fighting since 2002.
Meanwhile, bid target and ports operator P&O climbed 5.39% to 440p, after it confirmed it has agreed to sell its cold storage business to Canada's Versacold Income Fund for £183m. The company said the deal comprises £149m in cash and £34m in convertible debentures.
In the US stocks have rebounded from yesterday's decline as the Dow Jones Industrial Average has added 56.67 points, or 0.5%, to 10,463.44, on renewed confidence that earnings and economic growth will support a year-end rally.
Media shares are leading the advance after Time Warner reported profit that exceeded analysts' estimates and Comcast announced a cellular-phone venture with Sprint Nextel and three other cable providers.
Time Warner has risen $0.35 to $17.92, after the world's largest media company reported third-quarter profit of $0.19 a share as sales at its cable-television service increased, which beat the average analyst estimate of $0.17. Time Warner also announced it will more than double its share buyback to $12.5bn.
Time Warner's results, which showed a 15% jump in earnings at its cable-TV systems, buoyed shares of Comcast, the world's biggest cable-TV provider. Comcast increased $0.72 to $28.82, after it said it had formed a joint venture with Sprint Nextel, the No. 3 US mobile-phone company. Sprint Nextel has also added $0.67 to $24.52.
Meanwhile Symantec, the world's biggest maker of anti-virus software, has fallen $4.67 to $19.33 after forecasting third-quarter profit of $0.25 a share, lower than analysts expected.
Guidant has retreated $2.60 to $60.50, while Johnson & Johnson has also slipped $0.05 to $61.85, after Johnson &Johnson, the world's biggest maker of medical devices, announced it may abandon its acquisition of Guidant because Guidant won't accept revised terms.IFAonline
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