MONDAY MARKET CLOSE: Latest twist in Shire saga helps support FTSE

Britain’s benchmark share index staged a bounceback today, as sentiment was buoyed by a rise at bid-target drugs giant Shire.

AbbVie's latest bid values drug-giant Shire at some 31.3 billion. Picture: AP

The group saw its shares hit a record high of 5,050p, before settling at 4,903p, up 33p on the day, in brisk volume after its board said it was ready to recommend a new offer from US-based AbbVie. The latest bid – the fifth by AbbVie – values Shire at some £31.3 billion.

Some traders saw the announcement as opening the door to further bids, with AbbVie’s 5,320p-per-share offer as a starting point.

The FTSE 100 index of London’s biggest stocks closed up 55.97 points, or almost 1 per cent, at 6,746.14. The index dropped 2.6 per cent last week to post its biggest weekly drop since March as sentiment was hit by the threat of a banking crisis in Portugal.

Chris Beauchamp, market analyst at IG, said: “And so another stock market dip appears to have been consigned to the dustbin of history. On Bastille Day traders across the globe have displayed a little of the ardour that so animated those that stormed the infamous prison, while banishing any thoughts of beleaguered Portuguese banks to the back of their mind.”

Sports Direct was up 3.6 per cent to 723p after the retailer confirmed plans to open in Australia and New Zealand through a partnership deal.

Tesco was also a strong riser after a note from Cantor Fitzgerald upgraded the UK’s biggest supermarket to “buy” from “sell”, saying it was 35 per cent undervalued compared to its peers.

A reorganisation of UK operations could help recapture customers and lead to a return of sales growth in 2015, the broker added. Tesco improved 6.4p to 284.4p.

Rolls-Royce gained 13p to 1,050p after Airbus said it was to sell new versions of its A330 passenger jet powered by the British company’s Trent 7000 engines.