Marks & Spencer was leading the London market higher today amid talk that an Icelandic investment firm is building up a stake in the retailer.
The reports led to heavy trading of M&S shares for the second consecutive day, making it the highest FTSE 100 Index riser with a gain of 3%, up 10p to 356.75p.
This helped the Footsie cling on to positive ground, 1.1 points higher at 5047.9 by mid-morning. A positive close across the Atlantic also boosted shares.
The index needs to push above Monday’s close of 5050.4 to reach its highest level for more than three months, while a finish of more than 5060.8 would be its best for three years.
Tobacco stocks were also doing their best to propel the Footsie higher, with British American Tobacco (BAT) leading the way after a broker said its shares should be targeting the 1300p level.
BAT put on 18p to 1110p after JP Morgan said there was a compelling case to invest in the cigarette maker, particularly as the threat of legal action against tobacco firms in the United states was diminishing.
Silk Cut owner Gallaher was lifted by speculation that it was plotting a new acquisition. The stock was 6.5p firmer at 864.5p on reports that it will buy Spanish tobacco firm Cita for around €100m, while Imperial Tobacco rose 5p to 1548p.
But shares in telecoms giant BT slipped 2.5p to 220p as the City gave a lukewarm response to its new service allowing users to switch between landline and mobile networks on a single phone.
Elsewhere, newspaper publisher Johnston Press retreated 3% or 14p to 476.5p after it said uncertainty over the general election had scared off advertisers last month.
Internet gambling firm Empire Online saw its shares lift from their opening price of 175p to 177.5p on their first day of trading on the Alternative Investment Market.