By Rebekah Curtis
LONDON, April 7 (Reuters) - Britain's FTSE 100 index rose
0.6 percent by midday on Monday, as bid rumours breathed life
into nuclear power operator British Energy <BGY.L>, while an
upbeat Goldman Sachs note and rising gold hoisted miners higher.
British Energy (BE) jumped 3.7 percent after a source
familiar with the matter said European utilities EDF <EDF.PA>
and RWE <RWEG.DE> approached Britain's Centrica <CNA.L> about a
possible joint bid for British Energy.
Newspaper reports at the weekend said the two firms wanted
to team up with Centrica to secure a takeover of BE, which
operates Britain's nuclear power stations. Centrica, RWE and EDF
declined to comment, while BE could not immediately be reached
for comment. Centrica added 2.6 percent.
At 1043 GMT, the FTSE 100 <> was up 36.6 points at
5,983.7 as shares rose across Europe. Asian shares closed higher
and U.S. stock futures pointed to a stronger open.
On the economic agenda, investors looked ahead to the Bank
of England's interest-rate verdict on Thursday. The central
bank, facing the conflicting pressures of inflation concerns and
financial market turmoil, will likely cut borrowing costs by 25
basis points to 5 percent, a Reuters poll showed on Thursday.
(There's) hope for a cut in interest rates," said Edward
Menashy, an economist at Charles Stanley. "The inflation that's
in the system has already crept in. It's like driving a car and
looking at the front mirror and seeing where you've been."
"The main thing is to look through the windscreen and see
what's coming -- and what's coming could be a collapse in the
housing market."
MINERS CLIMB
Miners all gained and together added more than 19 points to
the index's upside. Gold rose more than 1 percent on Monday as
firm oil prices and positive market sentiment prompted
investment in the metal, a traditional hedge against inflation.
Anglo American <AAL.L> added 3.4 percent, helped by
Goldman's addition of it to its "conviction buy" list. Xstrata
<XTA.L> rose 2.9 percent after Goldman raised its price target.
Vedanta Resources <VED.L> also added 2.9 percent after the
bank raised its price target and upgraded the stock to "buy"
from "neutral".
Friends Provident <FP.L> added 3.9 percent after the Sunday
Times said U.S. buyout firm J.C. Flowers is working on a
sweetened bid worth around 3.5 billion pounds ($7 billion) for
the British insurer.
GlaxoSmithKline <GSK.L> dropped about 1 percent after
Dresdner cut the drugmaker to "sell". Rival AstraZeneca <AZN.L>
dropped nearly 2 percent, giving up some of last week's gains
which were inspired by brokerage upgrades and positive news
about its Crestor drug.
Among midcaps, recruitment firm Michael Page International
<MPI.L> shed 7.3 percent after it noted signs of a slowdown in
financial sector recruiting caused by the credit crunch.
It said that problems were confined to banking and related
financial sectors, with all other sectors growing strongly. But
the company cautioned it could not tell what would happen in the
next year.
Shares in Page's rival Hays <HAYS.L> dropped 5.7 percent.
(Editing by David Hulmes)
