London up on P&O speculation

A bid battle for ports and ferries firm P&O and broker upgrades for a string of top-flight stocks enabled the London market to bed in above the 5700 threshold today.

Excitement was triggered by a £3.55bn (€5.2bn) offer for P&O from Singaporean rival PSA International, which trumped an earlier bid by Dubai Ports World.

With brokers taking a more positive stance on the likes of banking firm Northern Rock and British Airways, the FTSE 100 Index advanced 19.6 points to 5724 by mid-morning.

P&O shares rose 6p to 513p to change hands above the 470p per share that PSA is willing to pay as traders awaited the next move from Dubai.

Also on the march this morning were Northern Rock and miner Antofagasta as shares in each company hit record highs in the wake of results yesterday.

Heavyweight broker Merrill Lynch said shares in Northern Rock were undervalued by as much as 25% as it raised future earnings forecasts in the wake of its £500m (€728.9m) annual profits performance yesterday.

Shares in Northern Rock lifted 34p to 1015p to break through the £10 mark for the first time.

Meanwhile, Antofagasta improved 28p to 2080p on news that quarter-on-quarter output rose 7%.

British Airways climbed 7.5p to 327.5p after Goldman Sachs put up its forecasts to reflect the fact that conditions for revenues were stronger than expected at the tail-end of 2005.

Elsewhere, home shopping retailer N Brown gained 6% or 9.75p to 184.5p after more marketing and range improvements secured a Christmas sales rise.

But software firm Misys dipped 5.75p to 235p after half-year profits stalled at £45m (€65.6m) and investors gave a lukewarm reaction to an overhaul of its banking business.

And a rollercoaster ride for furniture retailer MFI saw its shares recover to stand 6.75p down at 70.75p after it announced the settlement of a VAT dispute. Its stock hit a five-year low earlier in the session.