Britain's top share index scored a 1 percent gain on Wednesday, as results sent Lonmin and BSkyB flying, while an undercurrent of M&A hopes also helped inject life into the market. South Africa-focused miner Lonmin climbed 7.8 percent to an all-time high after maintaining its forecast for full-year platinum sales of 980,000 to 1 million ounces, easing concerns the company might cut its projections.
In the same sector, BHP Billiton and Anglo American both tacked on 2.6 percent. Meanwhile, M&A helped lift investors' spirits, with Royal Bank of Scotland jumping 3.6 percent as dealers cited an improved chance of the bank winning the take-over battle for Dutch rival ABN Amro.
Shares in Britain's biggest mortgage lender HBOS rose 1.1 percent as traders cited market talk that it could bid for Bank of Ireland. The FTSE 100 closed up 64.9 points or 1 percent at 6,484.5, while European shares also rose. "The market has its tail up in terms of investor morale," said Dan Bunting, head of research at Fortis Private Investment Management in London. "Things are being taken positively," he added, citing continuing M&A talk buoying the market.
"We've almost banished the word 'sell' from the lexicon. All our worst mistakes have been being too cautious about things which subsequently turn out to be salivated over by the private equity boys." Also helped by M&A hopes, Morrison Supermarkets climbed 2.3 percent as traders cited media reports of possible private equity interest in Britain's fourth-largest grocer.
Media stocks were mixed as satellite broadcaster BSkyB surged 5.5 percent, hitting a near three-year high after posting a 10 percent increase in nine-month revenues and saying it had added 51,000 net subscribers in the third quarter.
Other media stocks dropped after being buoyed in the previous session by News Corp's offer to buy Wall Street Journal owner Dow Jones & Co Inc for about $5 billion -- an offer which the publisher's controlling shareholders said they would vote against.
Shares in educational publisher Pearson gave up 3.4 percent to top the FTSE 100 losers, also affected by a Bear Stearns report which reinitiated coverage with an "underperform" rating, while Daily Mail & General Trust lost 1.3 percent.
On the upside, Imperial Tobacco rose 2.6 percent after UBS lifted its price target to 2,100 pence from 2,065 pence. Among mid-caps, online gaming firm PartyGaming slid 7 percent after saying a bigger-than-expected rise in sign-ups had led to a hefty rise in distribution costs that would push full-year earnings well below analysts' forecasts.
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