London - Britain's top equity index rose back within reach of record highs on Tuesday as steady metals prices helped mining stocks rebound while Barclays rose after Credit Suisse said it was one of its preferred European banking issues.
Traders added that new signs of takeover activity, with Nokia planning to buy telecoms peer Alcatel-Lucent just a week after Royal Dutch Shell's bid for energy rival BG, were also propping up stock markets.
The blue-chip FTSE 100 index was up by 0.2 percent at 7,077.12 points in early session trading, close to a record high of 7,095.36 points reached on April 10.
British bank Barclays rose 1.7 percent, making it the best-performer on the FTSE 100, helping rival Royal Bank of Scotland to rise 1.4 percent as well.
Traders said Barclays had benefited from a broker note from Credit Suisse. Credit Suisse said Barclays was its second-favourite European investment banking stock behind UBS , although it remained cautious on the sector's overall prospects due to tougher regulation and litigation issues.
Miners such as Rio Tinto and BHP Billiton also rose as the price of copper bounced up off its earlier lows.
However, Aberdeen Asset Management fell 2 percent after investment bank RBC cut its rating on the stock to “underperform” from “sector perform”.
Admiral Markets' Darren Sinden said those investing in the FTSE 100 had taken heart from the pick-up in mergers and acquisitions (M&A) activity, and from the fact that the FTSE had managed to stay above the 7,000 points level.
“We've managed to hold above 7,000 points, and signs of M&A are always welcome in the market,” said Sinden.
Uncertainty before next month's British election has weakened sterling, but the FTSE 100 has continued to push higher.
Traders have said that a weak pound could help the exports of the FTSE's international companies, and the FTSE remains up 8 percent since the start of 2015.
Reuters