Traders seem keen to keep mining group Vedanta Resources in the takeover spotlight.
A few days ago the talk was of a possible Chinese bid worth £27 a share. Now the whisper is of a possible £25 a share offer, helping push the Indian mining specialist 10% higher at £22.29.
The biggest mover in the leading index so far is Alliance & Leicester. It has finally put out its long-awaited trading statement after growing rumours of funding problems . The bank has written off £55m related to structured investment vehicles and problem loans, but it has agreed a two-year financing deal with Credit Suisse for £4bn. After the recent turbulence this was taken as reasonably reassuring and the bank's shares added 14% to 725p.
Numis said: "With modest growth in recent years and a relatively conservative lending policy we do not expect A&L to suffer as badly as many of its peers in terms of impairment. The group continues to hold £346m of SIV and mezzanine note exposure as at 31.10.2007 and £693m of off-balance-sheet conduit assets. It is possible that these assets may lead to further pain for A&L shareholders but the quantum of exposure looks very manageable. Credit quality within the core mortgage book remains strong."
But the broker added: "While we see A&L as inexpensive we continue to believe that there is better value elsewhere."
Bradford & Bingley also issued a reassuring update and saw its shares add 6p to 308.75p.
At the moment the market seems to be defying gravity. The FTSE 100 index is up another 11.2 points at 6317.4 after yesterday's 165.5 point jump.
However there are growing signs of a consumer downturn, with retailers and pub groups today issuing cautious statements ahead of the key Christmas period, and today came news from the Nationwide of the steepest fall in house prices for 12 years.
Central banks are still pumping money into the system to keep the credit lines open, while Libor - the rate at which banks lend to each other - continues to rise.
What seems to be driving the market at the moment is the hope of further interest rate cuts on both sides of the Atlantic. But any cuts that are made will be as a result of worries about the global economy and the continuing credit crunch, which is hardly a cause for optimism.
