London was given an extra lift in the afternoon as markets on Wall Street opened strongly. Also helping sentiment was some reassuring economic figures from China. Chinese industrial production rose by 13.3% in May, assuaging some observers' fears that economic expansion in the fast-growing country could slow.

The notable riser of the day was in the FTSE 250. Avis Europe surged by more than a half on the news that the Avis car hire brand is set to return to single ownership after US operator Avis Budget launched an agreed bid.

Avis Budget will offer 315p cash for each Avis Europe share in a deal that values the UK listed company at around £636m. The mid-market price of Avis Europe on the day before the bid was announced was 196.6p.

Royal Bank of Scotland was among the best performers on the FTSE 100 after reports suggested that it is in talks to sell its vehicle-leasing business to General Electric, the American super-conglomerate.

Heading the other way was commodity trading house Glencore after the group reported its first quarter results this morning. The group's earnings were 6% lower than Nomura's estimates, primarily due to lower-than-expected marketing results.

Separately, Glencore's chief executive dismissed speculation that the firm is working on a bid for Kazakhstan-focused miner ENRC. ENRC, meanwhile, was heading lower with a host of miners, including Xstrata, Lonmin and Fresnillo.

Imperial Tobacco was providing a drag, a day after slashing its profit guidance. Imperial cut profit expectations for its Spanish business on Monday after competition in the country forced it to cut prices for cigarettes. As a result, Credit Suisse reduced its target price on the stock to 2,350p, from 2,420p. Sector peer British American Tobacco was also off the mark,

Supermarket giant Tesco fell lower early on but finished higher despite failing to return to sales growth in the UK. In the 13 weeks to 28 May, Tesco's UK like-for-like sales excluding petrol and the impact of VAT were down by 0.1% from the same period the previous year, in line with analysts' predictions, having contracted over the previous quarter. Total sales grew by 7% including petrol and VAT.

Drug behemoth GlaxoSmithKline was firmer after taking another step towards increasing its presence in emerging markets, with the acquisition of the remaining 51% interest in a joint venture established in China to develop 'flu vaccines.

Oilfield services firm Wood Group pleased investors after extending its contract with TAQA Bratani Limited, the energy company that is 51% owned by Abu Dhabi Water and Electricity Authority, for a further five years.

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BC

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