Takeover buzz boosts FTSE

Strong oil stocks and a fresh bout of takeover speculation kept the FTSE 100 Index in positive territory today.

The Footsie started the session on the back foot, but later recovered to stand 15.6 points higher at 6333.6 by mid-morning.

Financial Times publisher Pearson provided the latest merger and acquisition speculation as investors reignited rumours about a possible break-up of the company, which also owns book firm Penguin.

Shares were at the top of the Footsie risers board with a gain of 36p to 867p.

Investors were also looking at the deal potential of Scottish & Southern Energy, which gained 20p to 1540p. The fresh focus on consolidation came after Enel and Acciona said they were considering a joint offer for Spain’s Endesa.

Commodity prices added strength to the Footsie, with miner Kazakhmys ahead by 24p at 1173p and counterpart BHP Billiton 20p stronger at 1126p.

Oil majors were also up as the price of a barrel of crude remained at around $62. BP stood 8.5p higher at 537p, while Royal Dutch Shell gained 23p to 1665p.

British Airways led the fallers board with a drop of 6.5p to 519.5p, which analysts said extended the fluctuations seen following the Open Skies agreement between Europe and the United States earlier this week.

Sainsbury’s shares were under pressure after a report in the Financial Times said potential bidders faced a possible £3bn (€4.4bn) pensions commitment. The stock was down 7p at 543p, losing some of the bid premium built up in recent weeks.

Outside the top flight, shares in sub-prime mortgage lender Kensington slumped after it said that its chief executive had stepped down and that future profits would fall short of expectations. Shares were off 16%, or 127p at 667p.