The London market held in positive territory today as takeover talk added to higher oil and metal prices in giving blue chips a fillip.
The FTSE 100 Index closed up 27.7 points at 6456.7 after a stable session for London’s benchmark index.
However, shares in troubled mortgage lender Northern Rock endured a rollercoaster ride, with the stock swinging wildly amid speculation over the future of the company.
Northern Rock’s shares closed nearly 5% higher, up 9.1p at 194.3p, but had spent some of the day in the red, only picking up again on rumours it may receive a bid at around 200p a share. It had been reported that it might sell for as low as 100p at one stage.
Meanwhile, Halifax parent HBOS is said to have become the latest group to rule itself out of bidding for the crisis-hit bank, which last week had to borrow emergency funding from the Bank of England.
British Energy was the leading Footsie riser, helped by oil prices which hit a record high for the fourth straight session on Thursday, before easing back overnight.
The company was up 32p at 520.5p – a gain of more than 6% – as traders anticipated the benefits of higher fuel costs and said that the firm’s recent production problems looked to be behind it.
Other players in the sector on the front foot included BG Group, which lifted 7p to 855p, while oil giant BP rose 1.5p to 592p. Royal Dutch Shell, however, lost earlier gains to close 8p down at 2082p
A possible bidding battle for insurer Resolution between rivals Pearl and Standard Life sent the company’s shares soaring 3%, or 18.5p, to 702.5p.
Insurer Prudential also featured high on the risers’ board as investors reacted positively to news that the company had gained a new financial chief from rival Aviva. The appointment of Tidjane Thiam helped buoy the Pru 11p to 696.5p.
B&Q owner Kingfisher was the biggest loser of the session after broker downgrades following its interim results on Thursday disappointed investors. The stock lost 6.3p to 174.7p.
Heating and plumbing giant Wolseley also suffered, as investors sold off shares anticipating lower full-year profits from the group next week.
Fears over the impact of the sluggish US housing market on the Reading-based firm’s results sent the group’s shares 2% lower, or 18p, to 848.5p.
Housebuilder Barratt Developments – another posting full-year figures next week - was off 6p at 786p as Citigroup marked down housebuilders amid fears of a slower market in tighter credit conditions and falling consumer confidence.
Mortgage lender Alliance & Leicester, meanwhile, was off 18.5p at 737p as the lender announced higher rates on tracker mortgages following the credit crunch in global markets.
The biggest Footsie risers were British Energy up 32p at 520.5p, Northern Rock up 9.1p at 194.3p, Vedanta Resources ahead 70p at 2135p and Resolution up 18.5p at 702.5p.
The biggest Footsie fallers were Kingfisher off 6.3p at 174.7p, Kelda Group down 27.5p at 864.5p, Yell down 12.75p at 412.5p and Alliance & Leicester down 18.5p at 737p.