News of a tie-up between miner Rio Tinto and Canadian aluminium firm Alcan put the London market in positive spirits today.

The mining sector was on the front foot today after Rio Tinto unveiled a deal to create the world’s largest aluminium company.

The creation of a new aluminium giant was on the cards today after Rio Tinto unveiled an agreed $38.1bn (€27.6bn) offer for Canadian rival Alcan.

London’s leading shares staged a rally in afternoon trading today, buoyed by a strong opening in the US.

A swirl of takeover activity among blue-chips failed to prevent the London market retreating from six-and-a-half year highs today.

Wall Street closed mostly higher today, though technology stocks struggled to hold onto gains during the session, as a 27 billion dollar bid by Alcoa for Canadian aluminium rival Alcan buoyed blue chip issues.

Stocks in the United States ended a listless session little changed today as cautious investors found few reasons to put money into the market, even as upbeat remarks on Alcoa and General Motors helped prop up the Dow Jones industrials.

The world’s second-biggest aluminium maker Alcan has reported its biggest quarterly profit in at least 14 years on higher prices, sales and currency gains.

Aluminum producer Alcan today reported an increase in fourth-quarter net profits and said higher metal prices helped offset the effects of the fall in the value of the dollar.

BRITISH power company National Grid said yesterday it would be able to meet demand this winter despite offering contracts to large manufacturers to use less power.

Steel group Corus look set to part with its aluminium business after seeing full-year losses widen to nearly £500m (€808m).

Disappointment at the overnight cut in US interest rates has knocked 149.1 points off the FTSE-100 index of top companies.