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Leading shares continued to make headway in another day of thin trading as City investors tackled a clutch of trading updates.
They gave a lukewarm reception to third-quarter numbers from Barclays with the shares retreating 9.8p to 333½p, making it one of the worst blue-chip performers. HSBC, which also reported third-quarter numbers, shaded 1.2p to 691.4p. Royal Bank of Scotland, which reported huge losses last week, added 0.9p to 40.3p.
The FTSE 100 index, which raced back up above 5200 yesterday, made a move on the 5300 level with a more modest rise of 13.89 at 5249.07.
The index was held back by a reversal of fortune for Vodafone, down 2.3p at 135.6p following yesterday's rise. The mobile phone giant is a big constituent of the index and any sizeable movement impacts on its performance.
Bid target Cadbury shaded a further penny to 760p following Kraft's decision to launch a formal bid yesterday without increasing the terms. City speculators are now waiting to see if a counter-bidder emerges forcing Kraft to improve the terms.
UBS clearly was not impressed with last week's results from Rentokil Initial, ½p firmer at 106p, and its promise to return its City Link courier business to profit. It has removed the shares from its European Support Services Most preferred list and, instead, has added rivals Mitie, ¾p lighter at 235p, and Serco, down 1½p at 534p. Morgan Stanley has tweaked its target for Rentokil from 115p to 120p with an overweight rating.
Unicredit has raised its target for British Airways from 145p to 210p but continues to rate the shares a hold. This is in spite of BA reporting losses of almost £300 million last week and having seen its shares drop from a peak of 243p this year already.
The Qatar sovereign wealth fund is to sell as many as 25 million of its preferred shares in Volkswagen, or about half its total stake in the German carmaker. The fund says it still plans to increase its holding of Volkswagen's ordinary shares ordinary shares to 17%. The move comes as Volkswagen attempts to sell up to 135 million non-voting preferred shares to help pay for a stake in rival Porsche Automobile. Qatar caused a stir last month when it sold £1.3 billion worth of shares in Barclays, fuelling speculation that it would use the money to either increase its 26% stake in supermarket chain
J Sainsbury, unmoved on 335½p, or launch a full bid.
Shares on Wall Street closed near their best levels of the day to extend Friday's impressive gains. A further burst of takeover activity cheered investors and boosted confidence. The Dow ended 203.52 higher at 10,226.94, stretching its gains in the past two sessions to more than 400 points.
Kraft's decision to launch a formal bid for Cadbury, worth almost £10 billion, got trading of to a firm start. The terms were the same as the original offer but the overall value of the bid is less, reflecting a deterioration in the Kraft share price.
Northrop Grumman has agreed to sell TASC, its advisory service division, for $1.65 billion (£991.2 million) to private-equity outfits General Atlantic and Kohlberg Kravis Roberts. Shares of Northrop, America's biggest defence contractor, rose 2.5% to $53.67.
Tokyo shares continued to make headway. Trading houses led the charge following rises in commodities, though a late rise by the yen against the dollar pared gains in many shares.
Advantest and other chip-related shares rose after gains by their US peers, while among bank shares Mitsubishi UFJ Financial Group rose 3.5% and Sumitomo Mitsui Financial Group 3.9% on comments by Japan's banking minister that suggested the government may not strictly enforce capital requirements for banks.
The Nikkei 225 Average closed up 61.74 points at 9870.73.
Hong Kong stocks rose to their highest in more than two weeks, with investors taking heart from the rally on Wall Street and a pledge by G20 to keep aid flowing to the world economy.
The Hang Seng index was 60.61 points higher at 22,268.16.
