M&A hopes lift shares in morning deals

The FTSE 100 pulled back some of the ground lost in yesterday's rout, helped by more good news for the banks and on reports Vedanta is looking to buy some Cairn asserts or maybe even bid for the group.

The FTSE 100 was up 17.2 points at 5262, having fallen more than 2% yesterday.

Overnight, the DJIA fell 2.49% and Asian indices fell 1-2% this morning amid growing concern about the outlook for the global economy. 

Cairn Energy led the risers on the FTSE, up 15.7p at 460.5p after Bloomberg reported Vedanta has approached the oil and gas group about the possibility of a bid for some or all of its assets. The pair refused to comment on the report that talks are at an advanced stage.

Cairn shares rose 15.2p at 460.3p but Vedanta shares fall 36p to £23.21.

Banks got another boost after news the Bank of International Settlements said banks will be required to hold much less cash in reserve than had been expected and much less than many already hold.

RBS shares added 0.82p to 46.82p and Lloyds added 0.86p to 70.9p.

Prudential shares added 10p to 572p after the group reported better than expected results 

But Goldman Sachs downgraded life insurers Old Mutual and Hiscox to 'neutral' from 'buy.'

The pair were 2.9p lower at 120.2p and down 4.8p at 349.8p respectively.