The FTSE 100 Index started the fourth quarter strongly today as positive economic data from the US and renewed optimism over Spain’s banks boosted investor confidence.
London’s main market closed 78.4 points higher at 5,820 after stress tests published on Friday showed the Spanish banking industry to be less vulnerable than expected.
Barclays saw its shares rise more than 3%, or 7.5p to 222.4p, while Royal Bank of Scotland was 9.4p ahead at 266.4p and Lloyds Banking Group advanced 1.1p to 39.97p.
The support of Xstrata’s board for a takeover, by Glencore International, ensured the blue-chip miner’s shares rose 22.5p to £9.80, up 2%.
Expectations that the deal will trigger further merger and acquisition activity in the sector spurred on rival miners and resource firms, with Anglo American up 74p to £18.91 and Eurasian Natural Resources leaping 6.8p to 315.5p.
Glencore, meanwhile, closed down 1.1p at £3.42, despite spending much of the session ahead.
Wolseley added 41p to £26.83 as investors awaited full-year results from the building supplies firm tomorrow.
Gambling firm Sportingbet was up nearly 4%, or 2p to 53.5p after it rejected a £350million takeover proposal from bookmaking giant William Hill, whose shares rose 1.9p to 318.7p.
AstraZeneca was the Footsie’s biggest faller, dropping 30p to £29.25, after the pharmaceutical giant’s new boss stopped a planned £2.8billion share buyback scheme.
Steven McKay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Xcite Energy adding 6.4% to 116.125p and Aberdeen Asset Management 2.5% higher at £3.19.
Faroe Petroleum fell 0.8% to 150.875p and Bridge Energy was 7.1% lower at 118.5p.