Royal Bank of Scotland is moving higher after The Sunday Times reported that Brazil´s Banco Itau could be sizing up the lender´s US operations. Those assets could fetch a price of 10bn pounds the paper reported.
Barclays was also up on widespread reports that it is planning an overhaul of its bonus system, that could see payouts withheld until bankers leave the company.
Coal and iron ore giant Evraz was in demand after UBS removed the stock from its least preferred list.
Glencore has been trading strongly. Several reports out over the weekend highlighted that it is expected to publish a smaller drop in its half year profits, tomorrow, than its take-over target Xstrata. That may give it additional ammunition with which to resist pressure from Xstrata shareholder Qatar Holdings for a higher offer price. Xstrata will report that profits for the half dropped 50 per cent to 1.4bn dollars (900m pounds), according to the City's consensus estimates. In contrast Glencore, whose trading activities mean it can profit from commodity price swings, is expected to report later in the month that its own earnings suffered a less steep fall of 37 per cent, to 1.5bn dollars, according to analysts at Liberum Capital.
Marks & Spencer was a high riser after the Sunday Telegraph reported that the High Street giant is the subject of takeover talks. The paper said that bankers at a number of London institutions have assessed the possibility of providing debt finance for a speculative bid of £6.0bn.
Engineering group GKN gained on the back of car sales data and a bullish research note from Credit Suisse this morning. The broker raised its target price for shares
and reiterated its 'outperform' rating, saying that the stock continues to offer an "undemanding" valuation compared with the sector.
Supermarket giant Tesco was making gains after launching mortgage services. Philip Clarke, Chief Executive of Tesco, described the launch of Tesco Bank mortgages as "a major milestone towards offering Tesco customers a full retail banking service".
Meanwhile, airline group IAG was pressured lower after Credit Suisse downgraded its rating on the stock to 'neutral' and cut its target price from 176p to 160p.
SSE and Centrica were also down after Deutsche Bank cut its recommendations on the shares to 'hold'.
FTSE 100 - Risers
Evraz (EVR) 250.10p +4.38%
Barclays (BARC) 176.25p +2.86%
IMI (IMI) 861.00p +2.62%
Marks & Spencer Group (MKS) 349.90p +2.58%
Vedanta Resources (VED) 977.50p +2.41%
Eurasian Natural Resources Corp. (ENRC) 397.50p +2.40%
Polymetal International (POLY) 904.50p +2.32%
GKN (GKN) 215.40p +2.28%
Glencore International (GLEN) 327.95p +2.17%
ICAP (IAP) 334.80p +2.01%
FTSE 100 - Fallers
Johnson Matthey (JMAT) 2,198.00p -3.93%
Pennon Group (PNN) 757.00p -1.43%
International Consolidated Airlines Group SA (CDI) (IAG) 149.00p -1.32%
Severn Trent (SVT) 1,718.00p -1.15%
Shire Plc (SHP) 1,936.00p -1.12%
Centrica (CNA) 320.00p -1.08%
BAE Systems (BA.) 311.60p -0.99%
SSE (SSE) 1,315.00p -0.98%
United Utilities Group (UU.) 680.50p -0.87%
Reed Elsevier (REL) 561.50p -0.71%