Switching from Cable to satellite

Investors piled into BSkyB yesterday after Business Secretary Vince Cable lost his power on Tuesday night to block a takeover approach by Rupert Murdoch's News Corp.

BSkyB shares rose 2 per cent, up 14.5p to 743p, as Investec Securities said the probability of News Corp being given the green light to acquire the remaining 61 per cent of BSkyB it does not already own had risen to 90 per cent from 66 per cent.

The final decision rests with Culture Secretary Jeremy Hunt, who is due to receive a report on the matter from regulator Ofcom at the end of the month.

The wider FTSE 100 Index closed in on the 6,000-mark as investors shrugged off disappointing economic data from the UK and US.

London's top tier closed 31.69 points - or 0.5 per cent - higher at 5,983.49, despite official figures revealing the UK economy had not grown as strongly as thought in 2010, with GDP growth downgraded for the past three quarters. On the other side of the Atlantic, America's GDP growth rate was revised upwards for the third quarter from 2.5 per cent to 2.6 per cent - but by less than expected.

The weak UK growth figures hit the pound, which fell to $1.53 against the dollars and €1.17 against the euro.

The Footsie has gained 8.2 per cent in December, on track for its biggest monthly percentage gain since July 2009.

David Morrison, market strategist at GFT Global, said: "It's just a pretty broad-based market rally as Christmas approaches.

"Of course, volumes are very low and it's really just tidying up at the year-end."

Trading volumes were 62 per cent of the 90-day average.

In London, banks continued an improved run, as reports suggested China was prepared to buy debt from ailing Portugal. The country is tipped by analysts to follow in the footsteps of Ireland and Greece and seek an EU-funded bailout.

Lloyds was up 0.5p at 68.9p, Royal Bank of Scotland added 0.5p to 40.7p, and HSBC gained 6.6p to 669.4p. But Barclays, which is closely tied to the Iberian peninsula, slipped 0.9p to 267.5p.

British Airways pulled back from losses earlier this week, lifting 2 per cent, as the Christmas travel outlook improved.

Heavy snow and icy temperatures shut the second runway at Heathrow airport and led to thousands of passengers being stranded.

But as the weather forecast improved, travel operators started to tackle lengthy backlogs and passengers were back on the move. BA shares added 5.2p to 273.6p.

Outside the top flight, Northern Foods jumped 4 per cent as it confirmed interest from food tycoon Ranjit Boparan in making an offer for the Fox's biscuits owner and gatecrashing an existing deal with Ireland's Greencore.Shares were up 2.5p to 63p.

In other takeover developments, outsourcing firm Mouchel rose 32 per cent after Costain said it had made an all-share approach valuing the embattled company at about 118 million.

The bid was rejected by Mouchel, which said this month it had received buy-out interest from a number of parties. Shares were up 23.3p to 96.2p.