Britain's blue-chip shares closed higher on Wednesday, catching up with other world markets after the UK Christmas break, although traders said the action was lacklustre in contrast to the midcap market where bid talk livened up business.
Condom and footwear maker SSL jumped 6.1 percent on speculation it could be a bid target in the New Year. Boots, household products firm Reckitt Benckiser and US healthcare giant Johnson & Johnson were mentioned as potentially interested.
Reckitt, which according to industry sources made an abortive bid approach to SSL in 2003, declined to comment, as did health and beauty retailer Boots.
Midcap bank and asset manager Singer & Friedlander bounced 4.2 percent higher on speculation of renewed interest from Icelandic bank Kaupthing, which has a stake of around 22 percent. The Daily Telegraph newspaper reported the Icelandic company had lined up a 1 billion pound warchest to make a major UK acquisition.
The FTSE 100 index closed up 21.7 points at 4,819.8, catching up with US and European markets which scored fresh year highs while the London market was closed on Monday and Tuesday. Wednesday's close was a fresh 6-week high and the FTSE's 6th consecutive closing gain, its best winning run since 7 straight days of gains in August.
"We're playing catch-up with markets that have been open while London's been closed...although the large cap market has been rather quiet and the oils have been pulling back a bit," said Alex Scott analyst at Seven Investment Management.
The FTSE 100 has climbed 2.6 percent since its last fall on December 17 and is now within touching distance of 2-1/2 year highs around 4,825 points.
Oil shares, which had slipped at the opening to reflect a fall in crude prices while the London markets were shut, levelled off after US oil supply data were broadly as expected. BP closed down 0.1 percent while Shell turned an early loss into a 0.2 percent rise.
Retailers were flat to easier on speculation that the sector had had a poor run up to Christmas and amid concerns that initially encouraging data showing higher numbers of shoppers braving the post-Christmas sales might mask a lower spend by consumers.
Retail information group FootFall said the number of Britons out shopping from December 26 to December 28 rose 2.1 percent from the same period a year ago.
"It's hard to get a clear picture at the moment, anecdotal evidence post Christmas points to a lot of individuals coming into the stores but in terms of the actual activity going on there isn't much indication yet," said Scott.
Mid-cap retailers WH Smith and Woolworths Group fell 2.8 percent and 1.2 percent respectively, unnerved by reports of disappointing consumer spending over the Christmas trading period.
"There's been talk in the press over Christmas that the retailers have had a particularly bad Christmas. Just looking around before Christmas my own personal view was that things were quiet," said a market maker.
Blue chip retailers were slack, with supermarkets group Sainsbury down 0.8 percent and Marks & Spencer unmoved.
Travel stocks were burdened by concerns over the repercussions of the devastating tsunamis which struck southern Asia on December 26. First Choice Holidays fell 2.1 percent. Intercontinental, which said it was searching for missing holidaymakers at its Holiday Inn hotel in Phuket, Thailand, closed 0.6 percent lower.
Insurers Royal & Sun and Aviva initially slipped 0.7 percent on concerns about the tsunamis but later rallied with the market to be up modestly.
AstraZeneca gained a boost on news the company won conditional approval to sell its anti-cholesterol drug Crestor in Japan, following a month of US regulatory and clinical trial setbacks. Its shares rose 1.1 percent but then settled back to be up 0.5 percent.
Turnover of 1.2 billion shares was predictably slack as many market players are expected to extend their holidays until the New Year. UK markets remain open until a half trading day on Friday and then reopen on January 4.
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