Britain's leading share index rose on Monday to close at its highest level in three and a half months, led by mining shares on an albeit thin market because of the US Labour Day holiday. Mining stocks were the biggest risers, buoyed by recent strength in Asian markets.
Kazakhmys rose 3.8 percent, while Vedanta Resources was up 2.6 percent, and Anglo American gained 3.1 percent. The part-owners of Chile's Escondida mine rose on continued positive sentiment following resolution of the strike disputes, with BHP Billiton up 2.8 percent and Rio Tinto up 3.4 per cent.
"Miners are a bright spot for traders and there is a lot of buying on weakness. Miners are benefiting from strength in gold and copper and continued relief that mining disputes are over at Escondida," a dealer said.
Among financials, Man Group rose 2.8 percent, which traders attributed to the knock-on effect from an announcement on Monday that RAB Capital, another hedge fund company, had acquired rival firm and Asian specialist Northwest Investment Management Ltd in a deal worth up to 20.6 million pounds.
The FTSE 100 closed up 37.5 points, or 0.63 percent, at 5986.6 on subdued trading volumes, its highest closing level since May 11 when global equities began a sharp two-month correction sparked by inflation worries.
Investors say the highlight of the week is the Bank of England's decision on UK interest rates on Thursday, which are widely expected to stay on hold after August's surprise hike. The banking sector was robust, with Lloyds TSB up 1.5 percent and HSBC Holdings up 0.8 percent. Northern Rock was up 0.75 percent, but Barclays bucked the trend, down 0.15 percent.
Shares in the London Stock Exchange rose 4.1 percent after Sunday newspaper the Observer said "Nasdaq Stock Market" was considering making a hostile bid for the LSE, in which it has amassed a stake of more than 25 percent. The newspaper did not cite any sources for the report.
London Brent crude fell more than $1 to below $68 a barrel on Monday, pressured by technical weakness and speculation that it could be several weeks before a further significant twist in the Iran nuclear row. Cairn Energy was down 1.2 per cent but BP and Royal Dutch Shell were steady.
Among standout mid-cap gainers, Stanley Leisure rallied 19 percent on talk that UK leisure conglomerate Rank was to bid for the company. It said it was evaluating a possible offer proposal but did not mention any names.
Intertek Group was up 6.3 percent after the testing and inspection company reported a 17 percent rise in first-half profit and said it expected growth to continue in the second half. Shares in software company Misys rallied 1.5 percent on market talk of a 275 pence bid likely for the company.
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