The latest twists in the takeover battle around insurer Resolution kept traders on their toes today and combined with a record high oil price to provide for a busy session.
In the afternoon, a strong start on Wall Street helped the FTSE 100 extend gains as stock markets in Europe joined the collective sigh of relief over comments from America's biggest mortgage lender Countrywide.
The group soothed worries over the extent of turbulence in financial and property markets by saying it expects to return to profitability this quarter.
That boost to sentiment combined with solid rises for miners and oil companies to leave the FTSE 100 up 85 points, or 1.3%, at 6,661.3.
A flurry of takeover talk and the bid battle for Resolution also powered gains in the London market, with retailer Kingfisher catching traders' eyes in the afternoon.
With the market making a tentative return to M&A activity after a summer hiatus thanks to the credit crunch, the B&Q owner was the biggest riser on the FTSE 100, jumping 12.2p, or 7.1%, to 185.3p. The company declined to comment on the latest speculation it could become a takeover target.
Standard Chartered Bank also declined to comment on talk surrounding its possible status as a bid target for Bank of China. Shares in the London-listed bank soared 84p, or 4.9%, to £18.05.
Moving from banks to insurers, it was a day of high drama in the sector as Standard Life announced its bid for Resolution and its contender Pearl then came in with a higher offer. Pearl also revealed it now has a 22% stake in the takeover target.
Pearl's £4.94bn cash bid was the equivalent of 720p per share. That compares Standard Life's offer of 517p a share in cash and 0.715 Standard Life shares for each Resolution share. That offer derailed a rival proposal from Friends Provident.
Before Pearl's announcement, Resolution said it expected to be required to pay a break fee of around £49m to Friends Provident, which Standard Life will reimburse to the takeover target subject to its offer completing.
Standard Life shares rose 2.25p, or 0.8%, to 278.5p, Resolution closed up 17p, or 2.4%, at 726.5p and Friends Provident edged down 0.8p to 174.9p.
Elsewhere in the takeover sphere, supermarket J Sainsbury was down after the takeover watchdog set a November 8 deadline for Qatari investment fund Delta Two to make a bid. Shares in the grocer lost 18.5p, or 3.2%, to 565.5p as doubts emerged over the predator's abilities to raise the funds it needs.
Moving to the day's main gainers, oil companies were in demand as crude prices powered ahead to fresh records.
Renewed fears over relations between the US and Iran pushed the price of a barrel of oil for December delivery through $92. That lifted Royal Dutch Shell shares, up 62p to £21.21, BP, up 16.5p to 629p and Tullow Oil, up 13.5p to 630p.
Signs of strong demand from China and a weakening US dollar also boosted metals prices and that lifted most of the miners. Xstrata added 187p, or 5.6%, to £35.28, Rio Tinto rose 182p to £44.17 and Antofagasta added 31.5p to 849.5p.
There was more support for telecoms stocks following this week's strong results from France Telecom. BT added 7.25p, or 2.3%, to 327.75p and Cable & Wireless gained 1.9p to 193.6p. The effect was also felt among the midcaps, where Colt Telecom added 7p to 190p.
Back on the FTSE 100 British Energy was under pressure again over worries about problems at one of its reactors. The shares ended down 10p, or 1.86%, at 538p, a fall that follows a drop in the shares on Monday after British Energy warned that the reopening of two nuclear power plants had been delayed.
Following rumours about the running of the company's Hinkley Point nuclear power station, British Energy said the station was running safely, a statement that helped erase at least some of the shares' losses.
Back to the insurers and Legal & General rose after its 8% drop in nine-month sales came within the market's expectations. The group also flagged up strong prospects for 2008 and the shares ended up 3.5p, or 2.7%, at 135.2p.
Tim Young at Collins Stewart said that quarterly new business figures are "not that important" rather it was other factors that mattered.
"Analysts focus on new business figures because it is easy to do and gives them something to talk about," he said in a note. "In practice, they have little or nothing to say about prospects for the business and profitability. The three things that do count – back office efficiency and efficacy, capital management and sales and marketing (not the same thing as gross new business premiums) – are harder to analyse and so are swiftly ignored. Legal & General has all three."
In the construction sector, smallcap M J Gleeson made up some strong ground after its results showed it swung into a profit in the year to June 30. Chairman Dermot Gleeson cautioned, however, that the credit crunch could cloud the outlook.
"The recent turbulence in the financial markets has resulted in mortgage lenders becoming more cautious. This, combined with higher interest rates, has had a marked impact on buyer confidence and house prices in many parts of the country. At this stage it is not clear how protracted or severe this market adjustment is likely to be," he said.
Still, the shares ended up 7.5p, or 2.2%, at 348.5p as traders focused on the fruits reaped so far from Gleeson's turnaround plan.
Struggling property group Erinaceous slipped 0.5p to 24p after it emerged that hedge fund Fursa has requested a meeting of the company's shareholders to demand the removal of two executives from the board. It wants to oust executive deputy chairman Neil Bellis and chief operating officer Lucy Cummings.
Finally, decontamination specialists Bioquell leapt 26p, or 13%, to 222.5p after it said its system for killing off hospital bugs had received an upgrade to "Category One" status by a Department of Health panel looking at ways to tackle suberbugs.