Britain's top shares ended little changed for the third straight day on Friday to seal a 0.8 percent rise over the week, as a rebound by GlaxoSmithKline and the major drugs stocks countered jitters about the health of the US economic recovery.
Hedge fund firm Man Group was one of the leading risers with a 2.6 percent climb as speculation persisted that it could be a takeover target, coupled with the covering of short positions taken over the past month, dealers said. The speculation this week has suggested that Merrill Lynch or other US firms were potential predators.
The FTSE-100 share index closed up 0.2 point at 4,698.9, after rising to 4,724.2, only 8 points short of this week's 28-month peak. It helped the FTSE to its sixth rise in the last eight weeks, although volume was modest at just over 2 billion shares.
Data showing slower than expected US jobs growth last month added to concerns that economic revival in the world's largest economy remains tentative, but dealers said the data and the threat that near-record oil prices would raise fuel costs and eat into corporate profits had only a muted impact.
They said shares were being supported by takeover activity, share buybacks by several major firms and growing confidence that UK interest rates were near a peak.
"There is quite a lot of bid activity rumoured, if not actually going on, and valuations are not high in traditional P/E (price/earnings) terms. Maybe people are worried to be out of the market," said Dave Bradbury, fund manager at Canada Life.
Nigel Cobby, managing director or European equities at JP Morgan, added: "When we had the weak period there was no heavy selling pressure, there was an absence of buyers and cash built up. Since then we've seen an absence of sellers and it's rallied up."
Drugs stocks added 6 points to the FTSE as GSK bounced 2.1 percent and Shire Pharmaceuticals rose 1.1 percent following a shake-out in drugs stocks around the globe since US giant Merck withdrew a key drug last Friday.
Analysts at Goldman Sachs also helped as they said European drug makers are in better shape than their US peers and the industry's business model is not broken. The bank said the European sector was showing respectable sales growth and had no major reliance on high-risk R&D products in 2004-2008.
Media stocks were generally higher, led up by news and information provider Reuters Group, which added 3.4 percent as investors reacted to an upbeat statement from the company on revenue prospects, dealers said.
But publisher Reed Elsevier lost 1.4 percent after Smith Barney cut its rating on the company to "sell" from "hold".
In contrast, brewer SABMiller added 1.4 percent after Dresdner upgraded its rating on the stock to "add". But rival Scottish & Newcastle dipped 2 percent as dealers cited worries that sales at its Russian joint venture Baltika could be hurt if Russia bans drinking beer in public, which is under consideration in its parliament.
Airport operator TBI led mid-caps with a 6.5 percent jump on hopes a break-up of the company could value the business at a 40 percent premium to market prices. The Daily Telegraph newspaper said investors controlling a fifth of the company wanted to sell off its assets.