LONDON (AFP) — UK blue chips closed stronger Monday, ending a depressing second quarter on a high note thanks to gains by commodity plays on the back of strong oil and metals prices, and M&A talk, with Wall Street turning higher in the afternoon.
At the close, the FTSE 100 index was 96.0 points firmer at 5,625.9, the session peak, well above the midmorning low of 5,520.2.
The FTSE 250 index also ended at day's highs, up 41.0 points at 9,145.8.
Vodafone was the most traded stock, seeing 306 million units change hands, followed by RBS, which saw 91 million shares switch owners.
Heavyweight oils and miners dominated on the FTSE 100 gainers board against a backdrop of firmer commodity prices.
Mining issues were also supported by media reports billionaire businessman Lakshmi Mittal is looking at entering the takeover battle for Rio Tinto.
The Financial Times reported that Mittal, the main shareholder in steelmaker ArcelorMittal as well as its chairman and chief executive, is said to be keen to secure larger supplies of iron ore.
The news helped Rio Tinto shares gain 166 pence at 6,009, while Anglo American took on 130 pence at 3,526, Xstrata was up 90 pence to 4,024, and BHP Billiton climbed 45 pence higher to 1,920.
Sticking with commodities, oil stocks moved higher again as a weaker dollar helped oil to hit a new trading record high, topping $143 per barrel in pre-opening deals before falling back.
BG Group shares added 56 pence at 1,307, BP was up 18 pence at 583.25, and Royal Dutch Shell gained 58 pence at 2,020.
Oil services blue chip Wood Group also benefited and was the day's second best performer, up 24.75 pence -- or 5.27 percent -- to 494.5.
However, oil exploration group Tullow Oil bucked the trend, shedding 20 pence at 955 on profit-taking after an update on a project in Uganda in which the company has a 50 percent interest.
Back on the upside, aerospace group Cobham was the day's biggest riser, up 11.4 pence -- or 6.12 percent -- at 197.
Vodafone was in demand, up 7.45 pence to 149.15, rallying following recent falls as it announced the launch of a music platform on the web with MySpace.
Staying with telecoms, Cable & Wireless gained 3.4 pence at 150.8 after the group said it has made a 180 pence per share improved cash offer for Thus Group, valuing its smaller peer at 329 million pounds.
Thus said the improved offer is "worthy of consideration".
Interbroker dealer ICAP also caught investors' eyes, rising 12.5 pence to 542 after Merrill Lynch upgraded its stance on the company to 'buy' from 'neutral' on valuation grounds, following its recent share price fall, but cut the target price to 650, from 689.
But among the blue chips casualties, weakness was seen in a number of banks, with Barclays shedding 6.5 pence at 291.5, Lloyds TSB losing 6.25 pence at 310.25, Royal Bank of Scotland dropping 2.75 pen at 215, and HBOS slipping 2.5 pence lower to 276.
"I think we're still seeing continuing nerves from analysts' comments last week, in that there could be further writedowns," said Keith Bowman from Hargreaves Lansdown.
But it was ITV that led the blue-chip fallers, down 2.8 pence -- or 5.89 percent -- at 44.7, in part because of a likely delay to the launch of its video-on-demand joint venture with BBC Worldwide and Channel Four Television, after the Office of Fair Trading on Monday referred it to the UK Competition Commission, and also with the media sector hammered by Trinity Mirror's profit warning.
The publisher of the Daily Mirror warned that full-year operating profit will be some 10 percent lower than expectations because of difficult trading conditions and an uncertain outlook
In response, Cazenove cut its rating on mid cap Trinity Mirror to 'underperform' from 'in-line'.
Trinity Mirror shares slumped over 25 percent in value, shedding 42.5 pence to 109, dragging down with it Johnston Press, 5 pence weaker at 52, and Daily Mail & General Trust, 16 pence lower at 313.75.
Friends Provident was the second worst performer, down 3.8 pence -- ot 3.58 percent -- at 102.2.
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