Britain's FTSE 100 index climbed on Wednesday, potentially on course for its first daily gain in 4 sessions, with renewed bid talk boosting steel company Corus. The Anglo-Dutch steelmaker rose 2.7 percent as talk resurfaced that Russian rival Severstal might be interested in a bid after its move for Arcelor was thwarted.
Traders said a strong outlook from German rival ThyssenKrupp supported the shares. ThyssenKrupp raised its full year pretax earnings forecast after third quarter pretax profit rose 30 percent.
Shares in online gaming firms went on a wild ride, falling at first on continuing concern that a US crackdown on small-cap BETonSPORTS could spread to the whole industry. Talk that US authorities had reached a deal to let BETonSPORTS resume business by the end of the week sent PartyGaming 11 percent higher only for the talk to fade and the shares to settle 2.6 percent lower.
By 0951 GMT the FTSE 100 was up 12.6 points to 5,694.3, off an earlier session peak of 5,719.5. The index still has a long way to go to recover the 3 percent it has fallen since last Wednesday, unsettled by the violence in Israel and Lebanon and the recent rise in oil prices which has fanned concerns over inflation and interest rates.
Roger Cursley, UK strategist at Investec, said blue chip companies were showing reasonable yields and price earnings ratios after the falls, adding the FTSE 100 felt steady around current levels.
"A resolution in the Middle East would certainly put points onto the Dow but the FTSE's got a fairly high oil content that would see a bit of a setback," he said.
"Broadly UK stocks would go better but not massively so, maybe 100 points but I don't think we're looking at going back to 6,000 because after all we weren't at 6,000 when the shooting started," he added.
News that the Bank of England's Monetary Policy Committee voted unanimously to leave interest rates at 4.5 percent gave prices a modest lift during the morning but shares drifted off highs as investors' thoughts returned to strong UK inflation data from Tuesday.
"The market's going to have to cope with the fact that we've probably got another interest rate rise coming in the UK but that we've probably seen a peak in the cycle in the United States," said Cursley.
"Our suspicion is that the economic growth news is going to get worse rather than better and that's going to put some pressure on the equity market. We're going to be watching earnings very, very closely," he added.
Shares in sugar and sweeteners firm Tate & Lyle climbed 2 percent after the maker of the Splenda sweetener said it had made a strong start to its financial year and that first quarter results were "well ahead" of the same period last year.
The company said in a statement ahead of its annual general meeting that the strong showing was mainly due to a continuation of the strong performance for food and industrial ingredients in the Americas and from sugar trading.
British Airways climbed 2.2 percent on a newspaper report pointing to the end of a price-fixing investigation launched last month by competition regulators in the UK and United States. The Daily Telegraph said BA expected the initial investigation to be concluded shortly.
Gas utility Centrica firmed 0.8 percent, helped by news J.P. Morgan raised its rating to "overweight" from "underweight" and continuing the strong showing by utilities after recent market falls. Utilities with their dependable earnings streams tend to be sought out in times of market uncertainty.
Mid-caps saw property website Rightmove slump 21 percent after the government watered down plans for next year's introduction of so-called Home Information Packs (HIPs) which must be provided by home sellers.
"The implication is that the overall value of each HIP will be lower than previously expected. Accordingly, revenues and potential earnings from Rightmove's HIPs product are likely to be significantly lower than current market expectations," said Rightmove. Property services company Countrywide fell 10 percent on the news.
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