LONDON (ShareCast) - After making a bright start UK equities were given an extra lift by better than expected US jobs data which gave support to predictions that any recession in the US will be short and shallow.

Wolseley led the advance after MF Global Securities advised its clients to buy the stock.

Retailers Next and Marks & Spencer rallied after an encouraging trading update from the John Lewis department store.

Royal Bank of Scotland advanced on a report in the Telegraph that private equity firm Texas Pacific Group is considering a bid for its insurance arm. "It is very premature and no decision has yet been made to bid for it, but TPG is interested," the report said.

Other bankers such as HBOS, Alliance & Leicester and Lloyds TSB were also sharply higher. Even Barclays made progress, despite Dresdner Kleinwort Benson saying the bank may need to raise £3bn through a rights issue to cover its losses resulting from the credit crunch.

Insurers were also wanted following an FT report which indicated German insurance giant Allianz is looking to buy a UK insurance group. Admiral, Standard Life, Royal & Sun Alliance and Aviva led the sector higher.

Rio Tinto was ahead after its chairman told an Australian paper it might consider a break-up to thwart BHP Billiton's bid.

With the market advancing briskly defensive stocks such as United Utilities and British American Tobacco got the cold shoulder.

British Energy was the worst performing blue-chip on reports that RWE has reportedly dropped plans to bid for the nuclear power generator.

Property group Capital & Regional had another bad day at the office following yesterday's rout on worries concerns that its flagship fund had breached its banking covenants. After the market closed the company acknowledged the “market concern around the capital structure of the Mall Fund”.

Rentokil shareholders face the prospect of a dividend cut after its problems within its parcels business, City Link, hit it hard in the first quarter. Revenue rose by 6.6% to £553.6m but profits slumped by 59% to £14.6 m after a loss of £15.4m at City Link. Excluding City Link, revenue rose by 8% and adjusted operating profit up 0.7%. Rentokil added that its current dividend is not sustainable and will be reviewed.

Reinsurance broker Benfield expects 2008's trading result to be marginally below 2007 due to currency moves and a softening reinsurance market. "Benfield has not been materially affected by the global credit crisis, and although it has had an adverse effect on some reinsurers, the overall impact on the global reinsurance market has been muted," it said in a statement.

Aircraft and car parts maker Hampson Industries has conditionally agreed to buy two US firms for up to $314m (£158.2m) and raise around £65m from a placing and open offer to part fund the acquisitions.

Best of the Best, which displays luxury cars as competition prizes in airport terminals, said profit and revenue for the year will be below expectations.

Business transformation consultancy firm Axon said its Axon Solutions unit has bought EnterSys, a leading provider of SAP consulting services to the oil, gas & chemical sector in North America, for an initial consideration of $7.5m in cash.

Deuxmil Marine rocketed higher Friday as it conditionally agreed to buy YCO for €9m (£7m) in cash plus €6m (£4.7m) in shares and raise £8.2m via a placing to fund the purchase and cover costs.

Philippine-focused oil and gas group Forum reported slightly higher pre-tax losses but said its working capital position is stronger than last year while the Galoc development remains on schedule.

Vehicle tracking systems specialist Minorplanet has rejected a written proposal from a third party but said it has agreed to talks with the party.

FTSE 100 - Risers
Wolseley (WOS) 541.50p +8.30%
Next (NXT) 1,225.00p +6.80%
HBOS (HBOS) 495.50p +6.56%
Kingfisher (KGF) 138.90p +6.03%
Alliance & Leicester (AL.) 540.00p +5.78%
Royal Bank of Scotland Group (RBS) 365.25p +5.56%
Admiral Group (ADM) 906.00p +5.41%
Royal & Sun Alliance Insurance Group (RSA) 141.60p +5.20%
Old Mutual (OML) 134.30p +5.17%
Lloyds TSB Group (LLOY) 452.50p +5.05%

FTSE 100 - Fallers
British Energy Group (BGY) 728.50p -3.89%
Thomson Reuters (TRIL) 1,578.00p -2.29%
Tate & Lyle (TATE) 522.00p -1.04%
John Wood Group (WG.) 430.25p -0.92%
United Utilities (UU.) 720.00p -0.83%
Severn Trent (SVT) 1,447.00p -0.82%
Smith & Nephew (SN.) 567.00p -0.53%
Shire (SHP) 919.00p -0.43%
British American Tobacco (BATS) 1,920.00p -0.31%
British Sky Broadcasting Group (BSY) 546.50p -0.27%

FTSE 250 - Risers
Galiform (GFRM) 82.75p +12.59%
BlueBay Asset Management (BBAY) 342.00p +7.97%
HMV Group (HMV) 144.00p +7.26%
Signet Group (SIG) 71.25p +7.14%
Kesa Electricals (KESA) 218.50p +7.11%
DSG International (DSGI) 69.25p +6.95%
Rightmove (RMV) 440.00p +6.93%
Dimension Data Holdings (DDT) 50.25p +6.91%
Burberry Group (BRBY) 510.00p +6.75%
Talvivaara Mining (TALV) 438.00p +6.50%

FTSE 250 - Fallers
Capital & Regional (CAL) 309.75p -17.78%
Fenner (FENR) 240.00p -4.10%
Dana Petroleum (DNX) 1,750.00p -2.13%
eaga (EAGA) 121.00p -1.63%
Inmarsat (ISAT) 456.75p -1.56%
BSS Group (BTSM) 375.00p -1.32%
SVG Capital (SVI) 732.50p -1.15%
Mondi (MNDI) 398.25p -1.06%
Chemring Group (CHG) 2,463.00p -0.93%
FKI (FKI) 86.50p -0.86%

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