Investors shook off interest rate worries for once, preferring to concentrate on a spate of takeover speculation surrounding the likes of Whitbread and Sainsbury's.
Leisure group Whitbread was 31p better at £17.70p on talk of renewed interest from private equity, with US group Starwood Capital again said to be interested. But traders pointed out that there could not be any talks currently going on, since chairman Anthony Hapgood yesterday bought 14,000 shares at £17.13 each.
Supermarket group J Sainsbury climbed 6.5p to 583.5p as property entrepreneur Robert Tchenguiz was believed to have taken his stake from 5% to 11% through a range of different share purchases and derivatives. A Qatari investment fund has already taken a 25% shareholding in the company, prompting speculation it could face a new bid shortly after seeing off a private equity consortium led by CVC.
The Qatari fund, Delta Two, is run by property finance specialist Paul Taylor, who used to work with Tchenguiz. The connection of course has prompted speculation the two are working together, but this is reportedly not the case.
Elsewhere Vodafone added 2.4p to 166.2p on growing hopes it would be named as the European partner for Apple's iPhone. There was also talk of a programme trade to buy around 1.8bn shares at 168p, but there was scepticism among some traders about this tale.
Overall shares moved higher, despite an opening dip on Wall Street. By the close the FTSE 100 was 43.7 points higher at 6571.3.
In some ways it was a surprise that interest rate fears seemed to be put to one side. A survey from Nationwide building society today showed an unexpected 1.1% rise in house prices in June, making a rate rise next week almost inevitable. The members of the Bank of England's monetary policy committee were up before a Treasury select committee and there were few signs a rise was not on the way.
Across the Atlantic, the US Federal Reserve is expected to keep rates on hold at 5.25% this evening.
Property shares moved higher as traders said recent falls had been overdone. So Liberty International was lifted 17p to £11.73 and Land Securities added 19p to £17.46.
Experian, the credit information group, continued to benefit from its recent acquisition of 65% of Brazil's Serasa, as well as a smattering of the usual talk of private equity interest. It led the risers in the leading index, climbing 20.5p to 626.5p.
Miners were boosted by possible supply shortages after Chilean workers voted to go on strike, with BHP Billiton adding 41p to £13.86 and Rio Tinto up 91p to £37.81.
Oil companies were buoyed by a rise in the crude price, and upbeat noises from KBC Peel Hunt whose analysts upgraded Royal Dutch Shell A shares, up 48p to £20.05, and BP, 11.5p better at 599p. Morgan Stanley and Shore Capital were also positive on Shell.
Heading lower was drinks group Diageo, down 27p to £10.38 on profit taking following an in-line trading statement.
Among the mid-caps, Domestic & General, which specialises in providing breakdown insurance on household appliances, jumped 134p to £13.61 after it said it had received a number of other bid approaches after a possible offer from rival Homeserve. Analysts said insurance companies could be among the other interested parties.
But there was a mixed reaction from analysts to final results from book and music retailer HMV. Profits more than halved to £48.1m, and there was no definitive news on any sale of its Japanese business, which disappointed the market.
Evolution Securities issued a buy recommendation, Seymour Pierce said hold, but Numis and Panmure Gordon both advised selling the shares. The bears won out, with HMV down 4p to 1185p.
Panmure also did some damage to Mike Ashley's Sports Direct, down 4p to 183.5p. The broker issued a sell note and cut its profit forecast for this year by 8% and its price target from 180p to 170p.
"With no property backing and growing unease about the dynamics of future growth, given the collapse in like-for-like sales in response to the gross margin hike and the promise of a never-seen-before store opening programme, it is difficult to have any visibility as to when forecasts will bottom out," said Panmure.
Lower down the market electric vehicle specialist Tanfield rose another 3p to 187p after it said it was paying £50m for US aerial platform maker Snorkel, while mining group Cambridge Mineral Resources rose 0.75p to 4.625p as it gave an update on its uranium deposits in Bulgaria.
Zenith Hygiene added 13.5p to 42p. Stanley Fink, of Man Group fame, bought 288,217 shares at 23p taking his stake to 5.25%. The purchase came a day after the company's shares fell back after it warned it would make a loss in the full year.
It is rather unusual for problems in the US subprime mortgage market to be a reason for a share price jump. But investment group Caliber Global added 0.93p to 4.705p after it said a $8.8m loss in the first three months of the year, due to subprime turmoil, meant it had decided to sell all its assets and give the money back to shareholders.
But surveillance group Petards lost 0.34p to 0.935p after a profit warning, while IX Europe fell 7.5p to 124p after Charles Stanley cut from buy to hold in the wake of a 125p a share offer from US internet group Equinix.