Real estate helps Footsie gain ground

Real estate stocks powered the London market higher yesterday as traders marked Liberty International as a potential bid target.

Liberty jumped 8 per cent to 945p after Simon Property Group, the US shopping centre developer, disclosed a 3.45 per cent stake.

"We believe the stake building should be taken seriously and underpins our view that UK property stocks own generally high quality assets with (long-term) value creation prospects," JPMorgan said.

British Land - in which the Singapore government this week raised its stake over 5 per cent - was up 6.2 per cent to 751½p. Hammerson gained 5.2 per cent to 918p.

The FTSE 100 finished higher by 2.5 per cent, up 135.4 points to 5,505.6, helped by short covering ahead of the long weekend.

Banks advanced on the prospect that Lehman Brothers might be sold. State-run Korea Development Bank said it was studying options for investing in Lehman, and would not rule out making a hostile bid.

Royal Bank of Scotland gained 5.4 per cent to 220¾p and Barclays was up 5.1 per cent to 326¾p.

Lloyds TSB climbed 7 per cent to 299½p, with stake-building talk rife, after 20m shares changed hands in a single clip.

Among the miners, BHP Billiton took on 1.7 per cent to £16.98 after the Australian antitrust regulator identified the iron ore market as its only key concern regarding the proposed takeover of Rio Tinto .

Rio, which is expected to give further details of its bid defence plan with interim results on Tuesday, was up 0.7 per cent to £51.79.

Copyright The Financial Times Limited 2008