Takeover speculation and hopes of a dividend hike from Royal Bank of Scotland caused shares in the financial sector to surge today.

One of the UK’s largest power stations was sold today to French merger partners Gaz de France (GdF) and Suez.

Lloyds TSB shares rose 4% today after the smallest of the “big-five” banks revealed in-line pre-tax profits of £3.9 billion for 2007.

French President Jacques Chirac, in Berlin for a meeting with German Chancellor Angela Merkel, today dismissed as “completely absurd” suggestions that his country is pursuing protectionist policies, rejecting criticism elsewhere in Europe of a government-backed merger between two French energy firms.

EU INTERNAL Market Commissioner Charlie McCreevy is expected to declare all-out war today on France, Spain and Poland and other countries trying to block foreign takeovers.

Italy’s Premier Silvio Berlusconi said today that the European Union should intervene in the planned French energy merger aimed at blocking a potential hostile bid from Italian energy company Enel.

Hopes of consolidation in the energy sector combined with a flurry of corporate results to send the FTSE 100 Index towards the 5900 mark today.

Gaz de France and Suez today announced details of their hastily-arranged all-French merger, designed to create a new leading player in energy and environmental services – and fend off a bid for Suez by Italian power company Enel.

The latest flurry of deal-making in the energy sector added impetus to the London market today and put it within striking distance of the 5900 barrier.

Talks begin today towards sealing a controversial merger deal between state-owned gas producer Gaz de France and utility company Suez that would create a world energy leader and block a hostile bid from Italy.

An Egyptian passenger ferry carrying around 1,300 people, mostly Egyptian workers returning from Saudi Arabia, sank in the Red Sea overnight.

FRENCH stocks including Suez slipped yesterday, although Arcelor and Air Liquide gained.

The French owner of 25% of water and sewerage group Southern Water has set about seeking a buyer for its stake, it was reported today.

Engineering firm Amec signalled the break-up of its operations today after conceding the businesses needed more resources than it could provide.

ROBERT WINSTON enjoyed an unexpected day to remember when 40-1 chance Magical Romance dented some tall reputations in the Skybet Cheveley Park Stakes at Newmarket yesterday.

London shares ended a six-session run of successive losses when it closed up today boosted by a recovery in telecom stocks, strength in oils - led by an update from Shell - and gains in the heavyweight banking sector after Royal Bank of Scotland issued an upbeat trading statement, dealers said.