BAA buzz lifts FTSE

Airports group BAA made the running in the FTSE 100 Index as confidence rose that a £9.5bn (€13.9bn) offer could be only days away.

Shares jumped another 5% to build on the hefty gains seen last week after Spanish firm Ferrovial revealed it was mulling an offer.

The latest developments at BAA dominated the agenda during an otherwise quiet session in which the Footsie reached mid-morning two points lower at 5790.3.

The lacklustre session came despite strong gains on Wall Street overnight and signs from the Bank of England that growth and inflation in the UK should be steady over the next two years.

The share price rise for BAA – up 36p to 815p – came after reports linked the Singapore Government and Canadian fund manager Caisse de Depot et Placement du Quebec to the Ferrovial consortium.

BAA was followed on the Footsie risers board by a clutch of mining stocks after BHP Billiton posted record half-year profits of $4.36bn (€3.7bn). BHP shares jumped 10p to 964p as the Anglo-Australian company benefited from demand in China and surging commodity prices.

Others in the sector lifted by BHP’s positive comments were Antofagasta, ahead 36p at 2025p, and Kazakhmys – up 12p at 823p.

But banks and insurers were generally lower as some of the recent takeover speculation in the two sectors came off the boil.

This affected Lloyds TSB, which fell 4.5p to 545.5p, while Barclays was off 9p at 647.5p ahead of full-year results next week. Royal Bank of Scotland was also on the back foot, falling 9p to 1765p.

Among insurers, Prudential eased 7p to 599.5p as the stock gave back some of the gains seen last week in the wake of speculation of a merger with Norwich Union owner Aviva.