Britain's top share index rises

Britain's top share index rose on Monday as a bout of merger and acquisition activity among financial stocks offset lingering concerns over the US mortgage market ahead of corporate results later this week. The FTSE 100 index closed 0.6 percent higher at 6,624.4, rebounding after Friday's losses.
Friends Provident was top performer, rising 7.8 percent after it and fellow insurer Resolution said they were in advanced merger talks to create a group worth almost 9 billion pounds, rekindling hopes of consolidation across the insurance sector. Resolution gained 1.1 percent.
Legal & General gained 2.7 percent, Prudential rose 1.4 percent, and Standard Life put on 0.7 percent. Meanwhile, British bank Barclays raised its bid for Dutch group ABN Amro to 67.5 billion euros, helped by some of the biggest-ever overseas investments by China and Singapore.
Barclays said its new bid for ABN included 24.8 billion euros in cash and was up from its previous all-stock offer of 65 billion euros, but this was still below a rival 71 billion euro bid from a consortium of banks led by Royal Bank of Scotland. Barclays gained 3 percent, and RBS was up 0.9 percent.
"It shows you that (Barclays) has access to a vast supply of money as and when the Chinese feel that it's worthwhile backing a particular move by Barclays," said Edward Menashy, economist at Charles Stanley. China Development Bank, whose main function is to make loans in support of Chinese government policies, and Singapore state investor Temasek agreed to invest up to 13.4 billion euros in Barclays to aid its fight for ABN.
"Also we are continuing to see merger and acquisition possibilities, and some of the insurance sector of the market have felt the benefit of that," Menashy added. Miners firmed along with the broader market, despite lower metal prices and mixed blessings from broker notes. HSBC cut Lonmin's rating to "underweight" from "neutral" but raised Antofagasta's price target.
Rising US stocks also helped, as investors were reassured by deal news, including a take-over in the oil services industry worth nearly $18 billion, and by strong pharmaceutical sector profits. Last week US indexes slid 1 percent on disappointing results, while worries over the US subprime market also hurt European credit markets.
Fears that a crisis in the market could lead to a wider US credit crunch still lingered, however, taking its toll on the real-estate sector. British Land was the biggest loser, down 3.1 percent, followed by Liberty International, Segro, Hammerson and Land Securities, all down between 1.4 and 1.7 percent. Focus will turn to a batch of corporate results later this week, including BP, Shell, BHP Billiton, GlaxoSmithKline, BT Group, Kingfisher and Alliance & Leicester.