Speculation of M&A in various sectors, as well as rising precious and base metals miners, drove the FTSE upwards by 1.5% to 5,303.72 points by 2.15pm.

Man Group has won overwhelming shareholder support for its $1.6bn (£1bn) bid for GLG Partners, and has made a senior appointment from GLG for the enlarged group.

SVM's Hugh Cuthbert has more than doubled his exposure to banks in his Continental European fund this year as the sector has proved resilient in the face of regulatory threats.

Prudential's 1.5% rise in early trading, following better than expected first-half profits, helped the FTSE edge 0.3% higher to 5257.79 points.

EM PRIDE AND PREJUDICE

Barclays shares are 3% lower in early trading despite posting profits of almost £4bn in the first half.

A LINE IN THE SAND

Hedge fund Trafalgar Asset Managers has boosted a bet F&C Asset Management's shares will keep falling following its plan to acquire Thames River.

The FTSE edged slightly higher this morning, buoyed by upbeat earnings announcements from AstraZeneca and BAE Systems.

Cazenove has appointed John Warren from UBS to work alongside small and mid-cap manager Paul Marriage.