A late surge drove Britain's FTSE-100 higher on Monday as a dip in oil prices brought relief to investors on both sides of the Atlantic and as bid talk invigorated shares in Shell.
Shares in the oil major were up 2.2 percent by the close of play following a weekend press report that its executives were concerned about a possible take-over bid from French rival Total.
The FTSE-100 ended up 48.7 points at 4,350.2 - just below its best level of the day. The story was similar in New York, where the Dow Jones industrial average was up about 1 percent when London closed.
Analysts pinned the reason for the FTSE's late jump on US crude futures, which are still above $46 a barrel but eased back from an all-time highs after Venezuelan President Hugo Chavez survived a recall vote, calming concerns about the country's oil exports.
"We've got the oil price as a big determinant of what's going on, certainly in sentiment terms," said Alex Scott, an analyst at Seven Investment Management.
But market players also stressed that thin volumes meant market moves were easily exaggerated. London turnover totalled just 1.6 billion shares.
"Being technically oversold in a thin market means that UK equities should be highly responsive to even the slightest bit of good news. A genuinely positive surprise could easily drive up the FTSE-100 by a couple of hundred points," said Mike Lenhoff, chief strategist at brokerage Brewin Dolphin.
The slightly weaker oil price lifted shares in airline British Airways to the top of the blue chip gainers list, up 4 percent. Fuel makes up a major portion of BA's costs, and there have been concerns that high crude prices might affect the company's recovery.
Miners also put their weight behind the market as buoyant metals prices, a weak South African rand and a positive note from investment bank Morgan Stanley on cooking coal prices all conspired to drive the sector higher.
Anglo American ended up 3.9 percent, Xstrata rose 3.8 percent and BHP Billiton finished with a 2.9 percent gain.
Media stocks formed yet another strong spot on the back of cheery broker comments. Advertising agency WPP rose 3.8 percent after an upgrade from investment bank Morgan Stanley, while news and information group Reuters added 3.3 percent after analysts at Lehman Brothers repeated an "overweight" rating on the stock.
But medical devices maker Smith & Nephew missed out on the market's gains, ending down 1.6 percent. Dealers said investors remained disappointed with the company after it missed forecasts for second-quarter earnings earlier in August.
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