The FTSE 100 has started the week on a strong footing and pushed through the 6000-mark early on thanks to news of a potential bond insurer bail out in America and more takeover talk swirling around Alliance & Leicester.
The news late on Friday that banks were close to a deal to bail out bond insurer Ambac lifted stocks on Wall Street and the improved sentiment spilled over into Asia overnight and is now lifting European markets. Germany's Dax is up more than 1% and France's CAC is up almost 2%.
In London, the FTSE 100 managed more than 100 points of gains, a rise of over 2%, to as high as 6011.7 early on. It is currently at 5987.1, up 98.6 points.
Alliance & Leicester continues its rally from Friday with more speculation that it is a takeover target for Lloyds TSB, after the latter signalled it remains on the lookout for acquisitions. A&L shares are currently up 49.5p, or 9.7%, at 559.5p, having gained 80p, or 17%, since Thursday - the day before Lloyds' comment sparked the takeover talk.
The M&A chatter has boosted a clutch of banks, RBS is up 7.4%, at 406p, HBOS is up 5% at 678.5p and Barclays is 4.3% higher at 500.5p.
With property group Hammerson's strong results boosting its rivals, higher metals prices helping miners and strong oil lifting the energy groups, there are only seven fallers in the entire bluechip index. Top among those is Associated British Foods, the owner of Primark discount clothes stores, whose upbeat trading statement only inspired a brief period of buying this morning.
Updating, the market ahead of interim results out in April, AB Foods said they will show "good growth in the group's adjusted operating profit over the same period last year."
"Strong growth in Agriculture, Grocery and Primark more than offset the expected, and previously reported, decline in Sugar,' it added.
Jeremy Batstone-Carr, analyst at Charles Stanley said Primark delivered another "resilient performance" but by contrast, the company concedes sugar profitability will be "much lower than last year".
"On balance, a mixed bag, however, AB Foods should benefit from a lower tax charge in the current year, ensuring good growth in underlying earnings, notwithstanding the muting impact of higher working capital and interest charges," he said.
The shares are currently down 23p, or 2.6%, at 853.5p.
