FTSE up more than 1%

The FTSE 100 rose more than 1% today as markets were cheered by strong US corporate results and a major acquisition at home.

Banks Morgan Stanley and Wells Fargo both beat forecasts with second-quarter figures, following on from a 78% hike in profits from US technology giant Apple overnight.

And traders also got their teeth into a £2.5bn (€2.96bn) takeover of Durex maker SSL International by household goods firm Reckitt Benckiser - helping the London market add 75.2 points to 5214.6 at the close.

Wall Street's Dow Jones Industrial Average trod water in early trading following gains overnight as traders awaited testimony from US Federal Reserve chairman Ben Bernanke on the health of the economy.

Minutes from the Bank of England's July meeting showed Andrew Sentance again making the lone call for a rate hike, although rate-setters noted the potential impact of the emergency Budget on growth and considered the case for further support to the economy.

The pound eased below 1.52 against the dollar after reaching highs above 1.53 earlier in the session. Sterling slipped below 1.19 against the euro.

In London, BP contributed to the shares rise after investors welcomed a deal to sell $7bn (€5.46bn) of upstream assets, a move that will fund claims from the Deepwater Horizon disaster in the Gulf of Mexico. Shares were 12.45p higher at 399.9p.

And SSL shares jumped 33% in the FTSE 250 Index, up 295p to 1177p after it recommended a takeover offer from Reckitt Benckiser. Reckitt rose 110p to 3300p or 3%.

The deal comes two days after Tomkins, another second-tier stock, said it had received a takeover approach from a Canadian-backed consortium. Tomkins was up 1.1p to 300p today while Invensys, which is seen as potential bid target, rose 10.5p to 280.5p.

Elsewhere in the top flight, British Airways took off with a 10.7p rise to 210.1p after US approval for its transatlantic tie-up with American Airlines and Iberia.

Property firm Land Securities was 8.5p better at 589.5p after a well-received trading update boasted continuing momentum and the company fired the starting gun on its £350m (€415.1m) Trinity Leeds development.

Among the few Footsie fallers was medical instruments maker Smith & Nephew, which fell 26.5p to 560.5p after traders reported Citigroup placing eight million shares at 559p.

Telecoms firm Cable & Wireless Worldwide was on the back foot again today as analysts rushed out the red ink in the wake of yesterday's profit warning, which sent shares down 17%. Citi, Credit Suisse and JP Morgan all downgraded the firm, which fell by 3.3p to 65.7p.

Meanwhile Lambert & Butler maker Imperial Tobacco turned ex-dividend, meaning investors are no longer entitled to the latest payout. Shares lost 36p to 1908p.

The biggest Footsie risers were Kazakhmys up 72p at 1106p, British Airways up 10.7p at 210.1p, Antofagasta ahead 45p at 981p and Investec up 19.1p at 484.8p.

The biggest Footsie fallers were Cable & Wireless Worldwide down 3.3p to 65.7p, Smith & Nephew off 26.5p at 560.5p, Imperial Tobacco down 36p at 1908p and Icap down 4.4p to 388.2p.

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