BRITAIN'S index of the biggest 100 companies ended flat last night despite flag-carrier British Airways soaring on consolidation hopes.
The benchmark FTSE 100 closed at 6,087.3 after a volatile session during which it hit a high of 6,118.2. Major
continental European stock markets were closed for May Day.
Leading the charge on the upside, British Airways jumped 7.3 per cent to 243p after the airline announced late on Wednesday it was in discussions with two of its largest US rivals, American Airlines and Continental Airlines.
On the economic front, the Bank of England said the scale of losses and the economic fallout from the credit crunch may not be as bad as feared, and subprime write-offs could end up costing less than half market forecasts.
David Evans, a market analyst at BetOnMarkets.com, said: "The worst-is-behind-us rhetoric continues to flow from central bankers on both sides of the Atlantic. Markets are for the moment at least holding ground after (Wednesday's Federal Reserve rate cut] … and traders are taking an 'I'll believe it when I see it' approach.
"Although (yesterday's] buying is welcome, we won't see any significant momentum until all-important US jobs report is out of the way."
The jobs report is due out today.
Scotland's two listed banks had a quiet session. Royal Bank of Scotland gained a penny to 346p as Collins Stewart said that in the short-run it would switch from HSBC to RBS.
The broker said that, in its view, the UK domestic banking sector had a pretty weak revenue and profit outlook into 2009. HBOS shed 5.5p to 465p in the wake of the research.
Miners featured on both the risers and fallers boards amid the cocktail of takeover talk.
Xstrata chief executive Mick Davis's reported comments that he would have no problem with a takeover if it delivered value for shareholders moved the firm 86p higher at 4,032p, a gain of 2 per cent, as merger speculation revived.
Kazakhmys rose 2 per cent or 33p to 1,615p, and Anglo American was up 65p at 3,334p.
Vedanta had earlier clawed back losses after a downbeat note in the previous session, but ended the day down 3p at 2,242p. Eurasian Natural Resources was 40p down at 1,160p.
Newly merged media group Thomson Reuters received a boost after a well-received trading update. Its shares rose 52p to 1,615p as it targeted an extra $250 million (£126m) of cost cuts.
Shopping centre and office real estate group Hammerson fell 13p to 995p after it said property values had fallen further this year.
The leading Footsie faller was knee and hip replacement firm Smith & Nephew, which fell 13 per cent to 570p, after uncovering "unacceptable" sales practices at a recently acquired orthopaedics business.
The full article contains 493 words and appears in The Scotsman newspaper.
