London market goes up with smoke

The London market ended Monday comfortably above the 4700 level after a strong session for tobacco stocks.

The FTSE 100 Index held on to earlier gains to finish the session 34.3 points ahead at 4731.1.

Talk that the tobacco sector was poised for a fresh round of consolidation created a buzz in the top flight.

A rumoured bid by Imperial Tobacco for a Spanish rival left it at the top of the Footsie risers while industry counterpart Gallaher was second.

But the news was stronger outside the top flight where the Big Food Group agreed a takeover and the London Stock Exchange confirmed a second bid approach.

Imperial Tobacco shares hit an all-time high – up more than 4% or 61p to 1430p - following a weekend media report that it was planning a bid for Spanish rival Altadis.

Silk Cut owner Gallaher, which could become a takeover target in any consolidation of the tobacco sector, rose even higher with a 4%, or 33p, gain to 795p.

Brewing giant Scottish & Newcastle cheered 1.75p to 433.5p after clinching a deal to invest in Indian brewer United Breweries and merge its operations on the sub-continent.

Shares in Manchester United also rose 4% or 11.5p to 277.5p after reports that US sports tycoon Malcolm Glazer was considering a new £800 million offer.

National Express motored 13p ahead to 799p after revealing full-year profits were likely to top expectations following a strong performance from its trains division and a reduced loss from its Eurostar stake.

But convenience foods group Uniq faded nearly 10% or 20.5p to 186p after it said pension issues had impeded takeover talks.

Biggest risers included Imperial Tobacco, up 61p to 1430p, Gallaher 33p ahead at 795p, Anglo American lifting 27p to 1188p and Severn Trent advancing 21p to 953.5p.

Largest losers were Cairn Energy, down 65p to 1050p, British Airways off 3.75p at 221p, Hays weakening 1.75p to 121.25p and Tate & Lyle retreating 5p to 476.25p.