The FTSE 100 Index pushed back above the 5,000 mark today as renewed talk of Qatari interest in Sainsbury's thrust the UK's third biggest supermarket into the takeover spotlight.
Rumours that the Qatar Investment Authority - which already owns 26% - was hatching plans for another tilt at the grocer helped shares surge up the riser's board with a 5% or 16.1p gain to 344.2p.
The wider market added to Tuesday's near-3% advance, closing 49.8 points ahead at 5014.8 as the top flight clawed back a 1% fall in a tricky start to the session.
The turnaround came after gains on Wall Street as bank State Street reported stronger than expected results and raised hopes for the US reporting season, also helping to soothe nerves after a surprise fall in German manufacturing output.
The pound was virtually flat against the dollar, trading just below 1.52, and steady at 1.20 against the euro.
Banking giant Barclays led the risers board, adding 17p to 291.6p as an analyst said a break-up of the business could boost the share price by almost 40%.
Beleaguered BP - itself the subject of recent takeover speculation following the Gulf of Mexico spill - continued its recent recovery with a gain of 16.55p to 362.05p, amid reports that chief executive Tony Hayward was looking to raise funds from an Abu Dhabi sovereign wealth fund. Shares have now risen more than 20% since it hit a 14-year low on June 25.
Marks & Spencer was the leading Footsie faller as a better-than-expected first quarter performance failed to lift shares amid nerves over the outlook.
The group, which had seen decent gains in the days leading up to the update, lost 9.3p to 343.4p after a 3.6% rise in like-for-like sales.
As well as the sell-off for M&S, other retailers were impacted by a cautious review of the general retail sector by brokers at Royal Bank of Scotland.
Next fell 2p to 2075p, while Burberry - which also turned ex-dividend, meaning shareholders are not entitled to the latest payout - dropped 18p to 1370p.
In the FTSE 250 many oil and gas explorers rose after a note from UBS brokers talking up key drilling prospects in the second half, as well as a recent revival in merger and acquisitions activity in the sector.
The leading second tier performer was JKX Oil & Gas, which cheered 7% or 17.2p to 262.2p.
Elsewhere, shares in Clinton Cards tumbled 7% after the greetings card firm revised sales and profits expectations in the wake of disappointing trading since May. The company, which had raised its guidance in March, fell 2.75p to 36p.
The biggest Footsie risers were Barclays up 17p to 291.6p, Sainsbury's up 16.1p to 344.3p, BP up 16.55p at 362.05p and Royal Bank of Scotland up 1.9p to 42.8p.
The biggest Footsie fallers were M&S down 9.3p to 343.4p, Smith & Nephew down 9p at 578p, Burberry off 10.5p to 758.5p and Whitbread down 18p to 1370p.