In London this week, the FTSE 100 was up 4.5 percent for the largest weekly percentage gain since March 2003. Friday’s gain was 0.8 percent, and the 100 closed out the week at 5,974.9.

Not all companies posted gains on the week, however. In the insurance sector, Prudential lost 3 percent over the week to 577½p on an unimpressive interim report. Prudential has now lost 22 percent since March, when it turned down an offer from Aviva. Also down was Intercontinental Hotels Group, which lost 4.6 percent to 858½p after Starwood Hotels in the US warned of coming weakness in the second half of the year.

Companies that deal in biofuels were up on the week. Morgan Stanley commenced coverage on two of the companies, Biofuels Corporation and D1 Oils, on Friday, with both companies receiving “equal weight” ratings. Biofuels Corporation was up 7.7 percent to 118½p, while D1 gained 2.6 percent to 251¼p. D1 was also helped by talk of a takeover bid from BP.;

Boots and Alliance UniChem were both up on the eve of their merger as Alliance Boots. On their last day of trade as separate entities, Alliance UniChem was 4.1 percent higher to £10.68 and Boots gained 4.4 percent to 806½p.

Xstrata was the biggest gainer in the blue chips, adding 7.4 percent to £23.01 on the news that Inco has pulled out of the bidding for Falconbridge of Canada, leaving Xstrata an open field for a takeover.

The London equities markets were higher again on Tuesday, with the FTSE 100 gaining 0.3 percent to 5,851.2 and the FTSE 250 also up 0.3 percent to 9,248.5. Volume was up from Monday, with 2.6 billion shares changing hands during the session.

Boots Group and Alliance UniChem were each 2.1 percent higher, to 766p and £10.18 respectively. The gains came ahead of Monday’s scheduled completion of a merger between the two companies. JP Morgan issued a positive comment.

Brewer Scottish & Newcastle was up 2.4 percent to 533½p ahead of an expected positive half-year report due next month.

British Airways added 3 percent to 384¼p, a five-year high, as oil prices fell and in anticipation of positive earnings news next month. Morgan Stanley upped its target share price on BA to 480p and said that revenue growth predictions will have to be increased by at least 7 percent after the air carrier releases its next report on August 4.

In the pharmaceutical sector, Shire gained 2.9 percent to 852½p on the news that it has gained permission to sell its treatment for Hunter syndrome in the United States.

Cadbury Schweppes, which issues its half-year report on August 2, dropped 1.4 percent to 515p on rumors that it will issue a profits warning. The talk was based at least partly on ABN Amro’s lowered forecast, in which it cited rising costs and a recent salmonella problem in explaining its position.

Among small caps, Central African Mining & Exploration Company (Camec) was up 3.5 percent to 59p. Credit Suisse initiated coverage on Camec with an “overweight” rating and a target share price of 100p. Camec is starting to mine copper and cobalt in the Democratic Republic of Congo.

The equities markets in London were mixed on Tuesday. The FTSE 100 was up for the first time in five days, but the gain was only a slight 0.08 percent to 5,846.2 Meanwhile, the FTSE 250 dropped 0.16 percent to 9,542.2 as mid-cap miners saw losses.

There were gains on the day in individual stocks. BSkyB added 3.2 percent to 545½p after hedge fund traders closed out their short positions after it became clear that Sky would hold on to most of its rights to broadcast Premier League events. In consequence, Morgan Stanley and Cazenove both abandoned their “underweight” recommendations on the satellite broadcaster’s shares.

Health and beauty retailer Boots also saw gains on the day ahead of its earnings report, due Thursday, which rumor says will show a record pre-tax profit. In addition, it is being said that Boots has downplayed possible cost savings stemming from its merger with Alliance UniChem. The combination of talk spurred Deutsche Bank to up its rating of Boots to “buy” and to set its target share price at 850p. Boots added 1.6 percent on the day to 734½p. UniChem was also up, gaining 2.7 percent to 933p.

Elsewhere in the retail sector, Marks & Spencer was flat at 596p. Baugur, which sold out Marks & Spencer last week, is now said to be looking at building a stake in supermarket chain William Morrison, which added 1.7 percent to 194½p on the rumors.

The London equities markets saw little movement as a whole on Tuesday as the FTSE 100 was down by only 0.1 percent and the FTSE 250 fell fractionally to 7,891.9 on a volume of 2.5 billion shares traded.

Before its decline, the FTSE 100 hit a 4-year high of 5,471.2 earlier in the day, but losses in New York helped the early gains disappear.

BAT was the biggest loser on the FTSE 100, dropping 2.3 percent to £11.77 as investors waited to see if the Canadian Supreme Court would allow a suit worth C$10 billion against the tobacco company to continue.

The energy sector was up, however. BP ended the day up 1 percent to 699½p after reaching an all-time high of 675½p earlier on an upgrade from “neutral” to “overweight” from JP Morgan. BG Group gained 0.7 percent to 534½p.

Among oil explorers, Burren Energy rose 2.7 percent to 846p on an initial “buy” recommendation from Merrill Lynch. Tullow Oil gained 2.5 percent to 254p.

In the pharmaceuticals sector, Alliance Unichem led all bluechips as it gained 3.5 percent to 870p on rumors of forthcoming bids.

Meanwhile, O2 was up 1.6 percent to 155½p on an increased revenue guidance for its main operations in the UK and an upwardly revised full-year earnings guidance on its German unit. O2 shares hit an all-time high of 157½p earlier in the day.