Ongoing takeover speculation, which began in January when the price was around 150p but has recently resurfaced, supported Man Group's stock price, one analyst said. "I think the main driver at the moment is the takeover speculation. The fundamentals haven't changed," said Owen Jones, analyst at Shore Capital.
Europe's biggest hedge fund manager received a boost in early trading after Societe Generale upgraded the firm to "buy" from "hold" after the bank said the negative swing in the firm's share performance had been overdone, although it played down M&A speculation. Man Group will publish its Q1 Interim Management Statement on Tuesday.
The FTSE 100 index closed up 28.39 points, or 0.5 percent at 5,777.11, propped up by growth-sensitive stocks in banks and mining companies. These sectors combined to add 15 points to the index. European banks opened down on the day as Standard & Poor's cut its credit rating on Spain by two notches to BBB-plus on Thursday and put it on negative outlook.
S&P cited expectations that government finances will deteriorate more than previously thought because of a contracting economy and an ailing banking sector. The sector later rebounded, however, with FTSE-listed banks mirroring a steady uptrend until midday, led by Barclays with a 4.7 percent rise on high volumes. An investor revolt led by shareholders led the bank's Chairman Marcus Agius to promise to "materially" increase the dividend shareholders receive, which boosted the company's share price.
"The banks have done well in the first quarter despite concerns about the flaring up of the euro zone debt crisis, maybe that is a good point... But given the regulatory headwinds they face I don't think this is a good time to own them," said Peter Dixon, UK economist at Commerzbank. HSBC Holdings also made solid gains, adding 5 points to the index.
European markets were broadly higher on the daY as earnings continued to surprise to the upside. Of the 273 firms due to report on the stoxx 600, 29 percent have done so with 56 percent beating or meeting estimates and 44 percent missing, StarMine data showed.
"The earnings season is still broadly positive, but the majority of results have come in ahead of expectations and I think that is driving sentiment," said Keith Bowman, analyst at Hargreaves Lansdown.
The trend is stronger in the UK. Of the 14 FTSE 100 stocks due to report in the current earnings season, 43 percent have done so, StarMine data to the Thursday close showed, with 83 percent beating or meeting estimates and 17 percent missing. Meanwhile, analysts pointed to a brighter technical outlook for the near term.
"Prices bounced off a rising trend line support currently at 5670 and are challenging the previous high area around 5751. The upside breakout of this resistance threshold would open the way to a further rise towards 5775 (61.8 percent Fibonacci retracement of the March to April down move) and 5855 in extension (horizontal threshold). Only a push below 5670 would dampen the bullish sentiment," said Nicolas Suiffet, analyst at Trading Central in Paris.