The FTSE 100 Index overcame a tentative start to move back within touching distance of the 5800 barrier today.
Miners had looked like being a drag on the market before a further bout of takeover speculation revived spirits among investors.
By the close of trading the Footsie had put back much of Friday’s 44 point deficit to stand 29.4 points higher at 5793.5 – even though markets in New York started the week in lacklustre fashion.
The latest speculation involved Yellow Pages firm Yell as reports across the Atlantic indicated US-based search engine Google was keen on the business.
Yell shares jumped 20.25p to 570p, a rise of 4% as the market continued to look for signs of more merger and acquisition activity, following last week’s surprise Spanish interest in airports operator BAA.
Shares in the Heathrow owner experienced a more subdued session than of late, up 1.5p at 780.5p, despite reports at the weekend indicating that leading shareholders wanted as much as 900p a share for the company.
Lloyds TSB continued its upwards march after investors remained on alert for a bid from an overseas bank, possibly Spain’s BBVA or Wells Fargo of the US.
Shares put on 3p to 552p, while the rest of the sector benefited from hopes that bad debt levels in the forthcoming results season could be lower than expected.
Royal Bank of Scotland rose 5p to 1771p, Barclays cheered 9.5p to 651.5p, HBOS added 14p to 1010.5p and Alliance & Leicester gained 15.5p to 1082.5p.
Miners prevented further progress for the market, although closing prices in the sector represented a sharp improvement on earlier in the session.
The recent correction in commodity values left BHP Billiton 12.5p lower at 943.5p, Antofagasta off 16p at 1974p and Rio Tinto off 16p at 2734p.
In the retail sector, Boots was in focus after shareholders lost the right to the latest dividend payment and the company’s shares were consolidated to reflect the disposal of its healthcare division. Shares fell 13p to 707.5p.
JJB Sports moved in the opposite direction as investors followed up on press speculation that a private equity firm was lining up a bid, sending shares up 13.25p to 185p.
Elsewhere in the second tier, Photo-Me International surged 3% or 3p to 97.25p after the company won a new five year contract to supply its digital media kiosks to Post Offices across Britain.
Discount chain Instore, which owns the Poundstretcher business, suffered one of the biggest drops of the session after warning that profits would be “substantially” below expectations.
Shares slumped 19% – 10.5p to 43.75p – as it told investors that sales after the New Year had been weak with little sign of improvement.
The biggest Footsie risers were Tate & Lyle up 25p at 616.5p, Yell Group ahead 20.25p at 570p, Scottish & Newcastle up 11.75p at 512p and ICI ahead 6.5p at 350.75p.
The biggest fallers were Compass Group down 4.5p at 216.25p, Boots off 13p at 707.5p, Centrica down 4p at 283.5p and GUS off 15p at 1073p.