FTSE edges forward

The London market edged forward today as takeover talk provided the main focus on an otherwise slow day for traders.

Banknote printer De La Rue surged 32% as its French suitor confirmed it was behind a €1bn approach for the troubled firm, while blue chip miner Rio Tinto was also in the spotlight after its £2.2bn (€2.5bn) approach for Australian firm Riversdale mining.

The Footsie rose 24.96 points to 5770.3 amid the takeover excitement, despite early losses on the Dow Jones Industrial Average in America.

US stocks fell after Federal Reserve bank chairman Ben Bernanke hinted that a third round of quantitative easing may be needed to keep America’s recovery on track. He said in an interview last night that the US economy was still struggling to become “self-sustaining”.

Disappointing US payrolls data on Friday has added to concerns over the recovery.

The pound was up against a weakened euro at 1.18, as concerns in the eurozone over the debt crisis continued. Sterling was down against the dollar at 1.56.

In London, investor attention was set firmly on takeover developments in the Footsie and second tier.

FTSE 100 listed miner Rio Tinto has sparked a potential bid battle for Riversdale after it was flushed out as a suitor, with Rio’s shares lifting 40.5p to 4456p.

However, much of the focus was outside the blue chip index with De La Rue top of the FTSE 250 risers board – up 193.5p to 841p – after it confirmed an “opportunistic” approach.

French rival Oberthur Technologies later revealed it was De La Rue’s suitor.

Punch followed closely behind it with a gain of 4.3p to 69.2p in the wake of a report suggesting private equity firm CVC Capital Partners was preparing to bid for the group.

And elsewhere outsourcing firm Mouchel was 33% higher, up 15.7p to 72.3p, as it said it had received a number of approaches after recent hefty share price falls on financial fears.

Back in the FTSE 100, supermarket Tesco was among the fallers after broker UBS downgraded the group citing expectations for growth to slow over the next 10 years.

Shares in the retail giant, which reports back on third quarter figures tomorrow, dropped 6.9p to 420p.

Rolls-Royce was enjoying a better session, up 13p to 640.5p, thanks to news of recent energy project contract wins worth more than $110m (€82m).

The biggest Footsie risers were Capita up 34p at 669.5p, BP ahead 14.8p at 450p, Xstrata up 47p at 1437p and Burberry ahead 30p at 1109p.

The biggest Footsie fallers were Cobham down 4.8p at 194.5p, Randgold Resources off 145p at 5885p, Vedanta Resources down 49p at 2143p and Eurasian Natural Resources off 19p at 914p.