Britain's FTSE 100 ended higher on Friday, giving the index its biggest weekly gain in nearly eight months as miners put their weight behind the market, while bid talk rushed through several sectors, sending Centrica up sharply.
Shares in the utility finished with a 4.1 percent gain after the Russian gas monopoly Gazprom said it was interested in buying Centrica, but was not in talks with shareholders or management.
Steelmaker Corus also rose on renewed bid hopes, closing up 2.5 percent. The Anglo-Dutch group is seen as a target for Russia's Severstal after a merger deal between Arcelor and Severstal was rejected by Arcelor shareholders.
"It's an easy story to try and ramp up, that there's going to be consolidation in the sector," said one trader who was unconvinced by the latest speculation.
Take-over talk spread to online gamers as well, taking mid-cap 888 Holdings up 7 percent and Sportingbet 3.8 percent higher.
By the close, the FTSE 100 was up 41.9 points, or 0.7 percent, at 5,833.4 - below the session peak but still recording a weekly gain of 2.5 percent, its largest weekly advance in percentage terms since early November.
The FTSE's quarterly performance was less impressive, however, falling 2.2 percent in the three months to end-June, breaking a winning streak that saw the index finish higher over the previous eight quarters. The drop also marked its biggest quarterly percentage drop since the market sell-off of March 2003.
Philip Haworth, a portfolio manager at Aegon Asset Management, said he remained optimistic on the FTSE's prospects.
"There's a lot to give support to the market. There's a lot of M&A about, valuations are low and as yet there are no earnings downgrades of any great size across the market, quite the reverse. Estimates broadly are still going up."
Sentiment towards stocks was helped by Wednesday's decision to raise US interest rates by a widely expected 25 basis points - rather than a larger hike as some analysts had feared - and by softer rhetoric from the Federal Reserve about the possible need for further interest rate increases.
Despite a broadly positive mood, volumes were average at best as market players tuned in to major sporting championships including the Wimbledon tennis tournament and the soccer World Cup. Total UK turnover reached 2.6 billion.
Mining stocks dominated market action for much of the day, with Xstrata up 3.1 percent, followed by others including Anglo American, up 2.5 percent, and Vedanta, 2 percent higher.
Oil titan BP also added support, up 0.6 percent as crude prices held above $73 a barrel.
Financials stepped into the spotlight as investors zeroed in on stocks seen as likely to gain from stabilising equity markets. Fund manager Amvescap added 3.7 percent while insurer Prudential, the subject of a failed take-over bid from Aviva in March, rose 3.3 percent.
In the drinks sector, SABMiller added 1.3 percent, outperforming the stronger market as dealers said the stock had recently lagged its peers.
"The stock's been underperforming since the rand capitulated and got weak against the dollar. They got to such a level where they were at a massive discount to the sector. As we've had a bit of a rally in the market it's highlighted the value against its peers," one trader said.
Elsewhere among gainers, Brambles added 2.5 percent after selling its waste management arm for a higher-than-expected 595 million pounds.
Telecoms equipment testing company Spirent was among a minority of fallers, down 3.2 percent as Goldman Sachs added the stock to its "sell" list.