FTSE makes gains

Excitement at the prospect of the first major bid battle of the new year drove the FTSE 100 Index back beyond the 4700 mark today.

Excitement at the prospect of the first major bid battle of the new year drove the FTSE 100 Index back beyond the 5700 mark today.

Ports and ferries group P&O was the destination of speculative money after confirming an approach from Singapore ports operator PSA after the market closed last night.

Merger and acquisition activity across the Atlantic was also supporting shares in building materials supplier Wolseley as the Footsie surged 35.6 points to 5724.4 by mid-morning.

Shares in P&O rose more than 4% or 21p to 490p as investors licked their lips at the likelihood of suitors having to lodge higher bids to secure control.

PSA has indicated that it is willing to pay 470p a share while an offer of 443p per share has already been proposed by Dubai’s DP World.

Second on the risers board was Wolseley – up 3% or 39p to 1285p – after analysts said the 3.2 billion US dollars acquisition of US firm Hughes Supply by DIY giant Home Depot yesterday underlined the value in the company.

Banks were in focus as brokers raised their price targets on a number of stocks in the sector. Lloyds TSB was ahead of the pack, rising 8.5p to 504p and was followed by Royal Bank of Scotland, up 30p to 1807p and HBOS adding 14.5p to 974.5p.

And high gold and copper prices helped lift miners, with Rio Tinto the fourth highest riser – up 57p to 2691p.

Supermarket Morrisons was up 2.75p at 199.5p after describing its festive performance as solid and saying it was on course to meet expectations for profits in the year to January 29.

Outside the top flight, Body Shop International plunged 20% or 52.5p to 215.75p after warning on profits due to disappointing Christmas sales in the UK and United States.