FTSE up 0.6 percent
The top share index climbed 0.6 percent in early trading on Thursday, on the back of a strong rally in the United States overnight and continued merger and acquisition activity.
At 8:33 a.m., the FTSE 100 was up 40.4 points at 6,502.3, after the Dow Jones industrial average powered passed the 13,000 level for the first time on Wednesday.
European shares also rose.
"We are buoyed by M&A activity and sentiment in the U.S.," said David Buik of Cantor Index. "But we are now at a crossroads. We need to be extremely careful. There are still a number of bear squeezes out there."
The bid battle for ABN AMRO continued with the Dutch bank saying it would open its books to a consortium led by Royal Bank of Scotland, which has made a 72 billion euro (49 billion pound) rival bid for the bank. ABN had earlier agreed to a 65 billion euro buyout deal with Barclays.
Barclays gained 0.5 percent, while RBS fell 0.5 percent.
Elsewhere in the banking sector, HBOS advanced 1.1 percent after rising 3.5 percent on Wednesday, when it said it was confident of beating market earnings forecasts for 2007. Lloyds TSB gained 0.8 percent and Bradford & Bingley tacked on 1.2 percent.
Oil shares also rose as Brent crude prices hovered above $68 a barrel. Royal Dutch Shell climbed 0.2 percent, while BG Group put on 0.3 percent.
The Wall Street Journal said Royal Dutch Shell and its partners had agreed to pay a substantial annual dividend to the Russian government as part of a deal to salvage the $20 billion Sakhalin 2 venture.
In the mining sector, BHP Billiton advanced 1.1 percent, Rio Tinto added 1.2 percent, Anglo American tacked on 1.4 percent and Xstrata rose 1.1 percent.
- 1 June retail sales fall less than expected
- 2 RBS gets Chinese approval for Suzhou stake
- 3 Foreign investors biggest buyers of Barclays rights issue
- 4 "Dark Knight" breaks preview record
- 5 Home gas bills to soar as oil link strengthens
- 6 Alzheimers less likely for men over 90 than women
- 7 Kier cuts 350 residential housing jobs
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