Markets turn higher after US consumer confidence data

World stock markets nudged higher in mid-afternoon deals bolstered by news that consumer confidence in the US rose more than expected in August.

That lifted the Dow Jones industrial Average by 10 points to 10340 - but the index is still trailing well below last Friday's close of 10653 as investors weighed a mixed bag of data.

Consumer confidence jumped more than expected but retail sales rose a little less than economists had been predicting.

The inflation report showed consumer prices rose 0.3% in July, after three months of falling prices. That is good news for policy makers who have been increasingly worried that the US may be falling into deflation.

The FTSE 100 was higher, adding 22 points to 5288 boosted by M&A hopes. 

Aviva climbed 21.4p to 388.7p after it rejected a bid from RSA for its general insurance business. Analysts say Aviva will be reluctant to part with the business which it has repeatedly said is integral to its future outlook. RSA shares fell 1.4p to 127.1p.

Cairn Energy shares were 12p higher at 464.8p after reports that Indian mining group Vedanta wants to buy a majority stake in the group's Indian operations.

Vedanta shares fell for a second day as many wonder why it wants to diversify into oil. Shares were the top faller, down 121p at £20.60.