Commodities giant Glencore was the biggest faller on London's leading shares index today after being forced to raise its offer for Xstrata to keep hopes of a £56 billion mega-merger alive.
Glencore fell 4% after it upped its bid to 3.05 shares for every Xstrata share, 9% higher than its previous offer of 2.8 shares, after some of its target's biggest investors threatened to vote down the deal.
The wider FTSE 100 Index made modest gains, adding 17.5 points to 5794.8, following yesterday's 2% surge in the wake of the European Central Bank's move to offer unlimited funds to lower debt-ridden countries' borrowing costs.
And the announcement continued to lift European markets, with Germany's Dax and France's Cac-40 up 0.7% and 0.3% respectively.
Wall Street's Dow Jones Industrial Average was broadly flat as the London market closed after figures showed the US economy created a lower-than-expected 96,000 jobs in August.
However, the weaker figures only served to fuel hopes that the US Federal Reserve would signal another dose of quantitative easing next week to boost the recovery.
The pound was up at 1.60 against the dollar, which was hit by the money printing speculation. But sterling was down at 1.25 against the euro after the single currency continued to be boosted by the ECB's latest initiative.
Back in London, Xstrata saw its shares rise 4%, or 35p to 1014p, after Glencore launched a last-gasp effort to salvage the mega-merger.
One of Xstrata's biggest shareholders, Qatar's sovereign wealth fund, had threatened to vote against the deal but at the last minute Glencore cancelled a shareholder meeting which was due to finalise the offer and came back with an improved bid.
Its new proposal will also see Ivan Glasenberg remain as chief executive, whereas he had previously planned to let Xstrata's Mick Davis take the helm. Glencore shares were down 14.3p at 378.1p.
Other miners, as well as bankers, continued to take heart from ECB boss Mario Draghi's plans to buy bonds to take the pressure off struggling nations such as Spain and Italy, giving them more breathing space to repair their finances.
Evraz was top of the London market, adding 15% or 33.7p to 260.4p, while Barclays jumped 13.4p to 206.4p.
Sentiment in the UK was also boosted after official figures revealed the strongest monthly rise in manufacturing output for 10 years.
Manufacturing output grew by 3.2% in July, the Office for National Statistics (ONS) said, while the wider index of production grew by 2.9%.
In a quiet day for corporate news, staffing business SThree saw its shares lift 9% after it reported a rise in third quarter gross profits as strong demand for sectors such as energy and pharmaceuticals helped offset the squeeze in the banking sector.
Shares were up 24p at 295.5p.
The biggest Footsie risers were Evraz up 33.7p at 260.4p, Kazakhmys ahead 58.5p at 657.5p, Eurasian Natural Resources up 27.8p at 338.7p, and Anglo American ahead 132p at 1972.5p.
The biggest Footsie fallers were Glencore International down 14.3p at 378.1p, Diageo off 62.5p or 1702p, Imperial Tobacco down 82p at 2262p, and SAB Miller off 79p at 2762.5p.
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