The financial sector was in focus on Monday, with life insurer Friends Provident and predatory bank Barclays providing the main excitement on a rising FTSE 100.
The index of leading shares managed to close up 39.2 points, or 0.6%, at 6624.4 as rises for insurers and banks alongside brighter sentiment on Wall Street outweighed falls for property companies.
Friends Provident led the risers after it confirmed it was in advanced merger talks with Resolution. Friends Provident shares added 14.6p, or 7.8%, to 201p while Resolution edged up 7p, or 1.1%, to 636p. The news boosted hopes of deal across the insurance sector and Legal & General added 4.1p to 155.3p while Prudential climbed 10p to 733.5p.
As the latest news in the ABN Amro takeover battle emerged, Barclays was also on the rise. The UK bank confirmed that the governments of China and Singapore have both agreed to help finance an improved takeover offer for Dutch group ABN. Barclays shares rose 21.5p, or 3%, to 735p. RBS, which is leading a rival bid for ABN, edged up 1p to 611p.
Richard Hunter at Hargreaves Lansdown stockbrokers said it remained unclear who would win out.
"The latest instalment in this major banking tug of war has yet again thrown into doubt the identity of the eventual winner. Barclays continues to maintain that its offer will offer more synergies than that of the consortium," he said. "The most interesting part of its latest move is that it will potentially provide the existing ABN with a foothold in China - and the shareholders will need to take this into account when deciding which offer is best in the interests of the company."
Elsewhere among the bluechips, buoyant metals prices helped the miners put in more rises. Kazakhmys added 23p to £13.86, BHP Billiton climbed 32p to £15.17, Anglo American rose 81p to £32.57 and Antofagasta was the strongest performer of the lot, up 27p, or 3.7%, at 763p.
The fallers list was dominated by property groups, which suffered from continuing worries over the impact of UK rate rises and mortgage problems in America. British Land was hardest hit, down 42p, or 3.1%, at £13.14. Liberty fell 19p to £11.00, Persimmon lost 20p to £11.64 and Hammerson dropped 22p to £13.01.
Further down the market, media group Chrysalis, which recently announced the sale of its radio arm, was up 3.25p at 116.25p. Weekend reports suggested American music group Warner could be interested in bidding for Chrysalis's remaining music publishing business.
Elsewhere in the sector, magazines to radio business Emap edged up 0.5p to 824.5p after finally announcing a long-rumoured joint TV venture with Channel 4. The broadcaster is to pay around £28m for a 50% stake in Emap's music TV business, which includes the channels The Hits, The Box and Kerrang!.
Among the midcap fallers, software company Autonomy was down 54p, or 5.8%, to 881.5p as profit taking set in following its record results.
The Cambridge-based firm, whose shares have climbed 84% since the start of the year, said pre-tax profits were up 89% in the first half.
Analysts at Citigroup reiterated their "buy" recommendation on the shares.
"With strong revenue momentum and rising margin the valuation continues to be underpinned," they said in a morning note. "We would expect further positive momentum and catalysts in the second-half."
The biggest faller on a weaker FTSE 250 - down 37.2 points at 11,782.2 - was engineering company FKI. The group was knocked by talk that discussions with a potential buyer had ended. The shares were down 13.7p, or 11.1%, at 110.25p. However, there was no announcement from the company in response to the speculation and a spokesperson declined to comment. FKI holds its AGM tomorrow.
On Aim, home delivery chain Domino's Pizza rose 18p, or 6.3%, to 300p after beating expectations with a 14.9% rise in first-half like-for-like sales.
Greg Feehely at Altium described the results as "excellent".
"This business is genuinely firing on all cylinders. Whilst the inclement weather has helped drive the top line, we believe that creative product development, focused and targeted marketing alongside a relentless focus on service levels are equally important," he said in a note.
Faking It maker RDF Media recovered somewhat following its creative director's admission that he had edited the BBC documentary footage in which the Queen appeared to storm out of a photoshoot. The shares plunged last week as the BBC and ITV said they were suspending commissions from RDF, but they put in a marked recovery today, up 19.5p to 224.5p.
Finally, natural gas and exploration company Independent Resources edged up 1p to 72p after a positive update on its Italian coalbed methane property Fiume Bruna.