ASTRAZENECA shares rocketed to a new record high after drugs giant Pfizer confirmed its interest in a takeover of the UK company.
Pfizer revealed for the first time it had been rebuffed by Astra after initial talks in January valuing the company at £59 billion, and that further overtures last weekend were also rejected.
However, Pfizer's continued interest in a possible UK record takeover deal helped the FTSE 100 Index climb 14.5 points to 6700.2, despite further worries over Ukraine as the United States prepares fresh sanctions against Russia.
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The pound held on to recent gains against the US dollar and euro as investors awaited Tuesday's publication of GDP figures for the first quarter of the year. Economists are pencilling in a figure of 0.9%, which would take UK output within a whisker of its pre-crisis peak.
It would also take the UK a step closer to a rise in interest rates, a factor which has lent weight to the recent climb in the value of the pound. Yesterday, sterling was flat against the US dollar at 1.68 and versus the euro at 1.21.
Astra shares soared by 14% or 586.5p to a new record high of 4666.5p and have now increased in value by around a quarter or £11 billion since takeover speculation began last week.
The City is currently betting that Pfizer will succeed with a better offer as Astra's price is higher than the 4611p proposed in January. A deal to buy Astra would be the biggest foreign takeover of a UK firm, dwarfing the £17.7 billion paid by Telefonica for O2 in 2005. The activity helped fellow pharmaceuticals company Shire rise 76p to 3286p but GlaxoSmithKline drifted 2p to 1653p after an earlier strong gain.
Elsewhere, BG Group endured a rollercoaster session after it announced that Chris Finlayson had resigned as chief executive.
BG's shares have fallen in recent weeks after it slashed production targets due to continued problems in Egypt, where too much of its gas has been diverted into the domestic market instead of being exported.
It warned yesterday production this year will be towards the lower end of expectations due to the ongoing issues in Egypt but shares recovered from a weak start to finish a penny higher at 1146p.
Mining stocks were under pressure as Rio Tinto fell 93p to 3185.5p, BHP Billiton dropped 21.5p to 1902.5p and Anglo American eased 14p to 1519p.
Other high-profile fallers in the top flight included Royal Bank of Scotland, which fell 7.7p to 295.5p, and Royal Mail after a drop of 8p to 511.5p.
The biggest FTSE 100 risers were AstraZeneca up 586.5p at 4666.5p, Sainsbury's ahead 8.4p at 330.5p, William Hill up 8.1p at 348.1p and Shire ahead 76p at 3286p. The biggest fallers were ARM Holdings down 30.5p at 915p, Rio Tinto off 93p at 3185.5p, Royal Bank of Scotland down 7.7p at 295.5p and Travis Perkins off 44p at 1744p.