FTSE finishes higher

London's blue chip share index staged a late session rally today as optimism on Wall Street added to investor cheer over a potential takeover of Friends Provident.

The insurer closed 13% higher thanks to news of investment firm Resolution's unsuccessful approach.

In America, hopes over the upcoming bank reporting season saw the Dow Jones Industrial Average rise more than 1.5% in early trade, which helped the FTSE 100 Index in London finish the session 75 points up at 4202.1.

UK insurer Friends was by far the biggest gainer on the Footsie amid the prospect of a possible deal.

The stock gained 7.6p to 68p, closely followed by Aviva with a rise of 20.5p to 297.25p. The global insurance giant had fallen heavily last week amid fears of a dividend cut in next month's half-year results.

Other insurers on the front foot included Legal & General, which climbed 4.33p to 54.23p, and Old Mutual after a rise of 4.9p to 79.78p. Standard Life was 9.4p better at 182.4p.

There was bid activity also under way elsewhere as Centrica's £1.3bn (€1.5bn) offer for North Sea gas firm Venture Production was spurned.

Telecoms firms were likewise in favour today, with Vodafone a climber despite Societe Generale cutting its target price on the stock. Vodafone was 2.75p higher at 115p, while BT was 3.65p up at 104p.

Among the commodities stocks, BP gained 10.1p to 471.6p after it signed a memorandum of understanding with Azerbaijan's state oil company to explore in the region.

Oil prices were generally firmer - heading back towards $60 a barrel on a weaker dollar and attacks in Nigeria - which helped many players in the sector.

Royal Dutch Shell was 20p better at 1463p, Cairn Energy added 45p to 2115p and Tullow Oil gained 19p to 868p despite Deutsche Bank lowering its target price.

Miners were among those on a shortened list of share fallers, with Fresnillo down 11.5p at 470.5p and Lonmin off 14p at 985p.

In the FTSE 250 Index, Venture Production surged 6% or 43.5p to 828.5p on hopes of a higher bid from British Gas owner Centrica. Venture rejected an offer at 845p a share, but a leading shareholder has called on Centrica to pay at least 1000p.

It was joined on the way up by homewares retail chain Dunelm, which jumped more than 12% or 25.5p to 235.75p after a fourth quarter trading update. One analyst called the 5% rise in second half like-for-like sales "exceptionally strong".

Broadcaster ITV also attracted buying interest after broker UBS upgraded the company to buy from neutral with a price target of 37p. Shares rallied 7% or 2.25p to 34.25p.

The biggest Footsie risers were Friends Provident ahead 7.6p at 68p, Legal & General up 4.33p at 54.23p, Aviva up 20.5p at 297.25p and Old Mutual up 4.9p at 79.78p.

The biggest Footsie fallers were Fresnillo down 11.5p to 470.5p, Lonmin off 14p at 985p, Associated British Foods down 5.5p at 768.5p and Kazakhmys down 3p at 591p.