Market Report: Rising hopes of takeover lift Anglo American up

As analysts talked up the likelihood of the mining giant receiving a takeover approach, Anglo American was driven to the top of the blue-chip index, helped by deal activity elsewhere in the sector and a rise in commodity prices.

The group, which produces around 40 per cent of the world's platinum, climbed 125p to 3,344p after Bernstein's Paul Galloway described it as "the most likely acquisition target among the large diversified miners". The analyst suggested a bid could come from Xstrata, 40.5p ahead at 1,513.5p, possibly after the Anglo-Swiss company has merged with Glencore, the commodities trader which is expected by many to list next month.

However, Mr Galloway added that Anglo's "diversified portfolio and strong growth prospects could prove to be of interest for other purchasers as well."

Traders said that Anglo, along with the wider sector, received an additional boost from the news that the Brazilian iron ore producer Vale has made an offer worth $1.1bn (£673m) for South Africa's Metorex. The bid, plus strength across the commodities, meant the miners dominated the leaderboard of the FTSE 100 and helped the index shoot up 48.38 points to 6,055.75.

Vedanta Resources was lifted 36p to 2,467p after revealing its aluminium output for the fourth-quarter reached record levels. However, attention was focused on its proposed deal to take control of Cairn Energy's Indian unit, which is still awaiting approval and has now had its deadline put back to next month. Vedanta's chief executive, M S Mehta told analysts that it was still "committed to pursuing the Cairn transaction", but gave little further detail.

BP made a small gain of 3.6p to 478.5p after it was told by an arbitration panel that the injunction on its share swap with the Russian group Rosneft would not be lifted. The ruling was a victory for BP's partners in its TNK-BP venture, although the oil giant will be able to seek an extension for the Rosneft agreement's deadline.

As oil prices spurted up, the cruise group Carnival was left 69p lower at 2,373p while Tui Travel and International Consolidated Airlines declined 1.4p to 233.4p and 5.6p to 217.4p respectively. EasyJet also fell behind, retreating 8.7p to 324.3p after UBS cut its target price to 420p, saying that its "share price upside is limited as long as fuel continues to rise". However, the investment bank did add that the group's "valuation [would be] attractive should the fuel price stabilise".

Shire was in good health after receiving welcome news from the US, where the Food and Drug Administration gave an update on its safety review of drugs used to treat ADHD. The regulatory board said it was not recommending any changes to the medications' labels or to their use, and the pharmaceutical group – which has two products in the study – increased 28p to 1,819, with Bernstein admitting that "concerns over the possibility of a bad outcome have curbed our enthusiasm for [the group]."

On the FTSE 250, bwin.party dropped for the fifth consecutive day, shedding 6.4p to 135.6p. The gaming company is still feeling the effects of new gambling legislation in Germany proposed on Wednesday, and yesterday UBS downgraded its rating to "sell", saying that "whilst we do not expect the punishing regulation to cause all German profits to be lost, the uncertainty means this scenario should now be at least considered."

Perform was another company hit by the proposed regulation. The digital media company's float was pushed back from Thursday because of its exposure to the sector. Yesterday the firm, which distributes sports content to gambling websites among other customers, managed to get its initial public offering away. But it hardly enjoyed the reception it would have hoped for, falling from its issue price of 260p to 220p by the end of the day.

Back on the mid-tier index, Unite slipped 3p to 210.9p despite announcing that rising rents had helped the net asset value of its student property fund rise 1.7 per cent. Meanwhile Premier Foods powered forwards 1.25p to 31.1p on the back of Investec increasing its price target to 35p, with the broker saying the owner of Hovis and Mr Kipling "once again feels like an investable proposition".

Lamprell surged 19.4p to 360.3p, wiping out its losses on Thursday, when it announced it was in discussions over buying Norway's Maritime Industrial Services. The group, which upgrades and refurbishes oil and gas rigs, was helped by Evolution Securities, which said the potential acquisition "looks strategically and financially attractive".

On the Alternative Investment Market, Northern Bear shed 1.5p, closing at 11.25p, after the building services group warned its full-year profits would fail to meet market expectations because of the extreme weather at the end of last year.

Meanwhile, Burst saw its share price multiplied almost five times – soaring 19.5p to 24.5p – after the online video group Blinkx announced that it had agreed a $30m deal to buy the internet advertising company.

FTSE 100 Risers

Rio Tinto 4,524p (up 139p, 3.17 per cent)

Advances after announcing it has gained control of the Australian group Riversdale Mining.

Scottish & Southern Energy 1,312p (up 29p, 2.26 per cent)

Utility has its rating upgraded by Credit Suisse to "outperform" from "neutral".

Old Mutual 144.7p (up 2.2p, 1.54 per cent)

Moves ahead in a strong day for the insurance sector, helped by support from UniCredit.

FTSE 100 Fallers

Icap 519p (down 21p, 3.89 per cent)

Takes the blue-chip index's wooden spoon after it is downgraded to "underperform" by Credit Suisse.

Aggreko 1,666p (down 30p, 1.77 per cent)

Power generator supplier falls as Morgan Stanley says its "shares have run far enough for the moment".

Intertek 2,047p (down 18p, 0.87 per cent)

Testing group knocked back by JP Morgan Cazenove reducing its rating to "neutral".

FTSE 250 Risers

Centamin Egypt 152p (up 5p, 3.4 per cent)

Gold miner continues to rise, meaning it has now added more than 13 per cent in the last five sessions.

Talvivaara 550.5p (up 10.5p, 1.94 per cent)

Manages a partial rebound after its large fall on Thursday in the wake of its production report.

Halfords 356.2p (up 6.2p, 1.77 per cent)

Retailer moves forward despite UBS, Citi and Deutsche Bank all cutting its target price.

FTSE 250 Fallers

Bovis 423.6p (down 7.6p, 1.76 per cent)

Slips behind after Davy cuts its recommendation on the housebuilders to "underperform".

Hays 112.8p (down 1.3p, 1.14 per cent)

Recruiter still falling following its disappointing interim management statement on Thursday.

RPC 302p (down 1.3p, 0.43 per cent)

Packaging supplier edges back as it is hit by profit-taking after two consecutive sessions of rises.