THE burst of takeover and merger activity involving some of London's biggest and most heavily weighted stocks in the FTSE 100 injected much-needed confidence to stock prices yesterday. The FTSE 100 raced higher throughout the day, bolstered by confirmation that BP Amoco was involved in takeover talks with US oil group Atlantic Richfield plus news that drugs group Glaxo Wellcome has been holding merger talks with Bristol Myers Squibb of the US, and numerous other rumoured deals.
Footsie eventually finished 113.7 higher at 6,252.9, extending its gain over the past three sessions to 236.2 or 3.9 per cent.
The bullish feeling in the front-line stocks extended right across the rest of the market, with the FTSE 250 index pushing up 15.5 to 5,469.4 and the FTSE SmallCap nudging ahead by 0.2 to 2,394.5.
Traders suggested the latest mooted deals could propel the FTSE 100 beyond its previous record intra-day and closing highs within days. "We're looking at an extremely strong market in the short term and there are plenty of big market hitters expecting Footsie to move through 6,400 in the short term," said one marketmaker.
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