[R]9:30AM The FTSE 100 advanced by mid-day on likely merger deal.[/R]
The FTSE 100 in London advanced 31.2 points at 5,997,7 at mid-day after breaching the 6,000 level early in the trading. The performance of the benchmark index was also helped by sharp gains on U.S. markets overnight, where the Dow Jones Industrial Average struck a fresh all-time high.

Advancers

Corus shares led the gainers in London, up 15% on news that Tata Steel is considering a bid offer.

Oil stocks rallied, as OPEC announced a reduction in production of 1m barrel a day. BG Group rose 1.7% and BP advanced 1.4%.

Mining stocks were also in demand. BHP Billiton rose 2.3%, Rio Tinto put on 2.2% and Anglo American gained 1.7%.

Some minor stocks surged. Spirent Communications jumped 10.6% after the telecommunications group said its third quarter trading matched expectations. Viridian, the Irish water group, was up 6.5% on talk that an imminent bid was coming. Grainger Trust rose 3.6% on expectations that Vincent Tchenguiz, the property entrepreneur, could enter the running to buy the company.

Decliners

British Airways, a heavy fuel user, fell 1.9%. Xstrata lost 8.3%, as it went ex-rights following a recent share issue. Stanelco slipped a further 20.4% despite the packaging group statement that plans for a fund raising were still on track.

Other news

The Bank of England left interest rates unchanged at 4.75% on Thursday, but the investors expect another quarter point rise before the year is out.

The European Central Bank on Thursday increased eurozone interest rates by another quarter percentage point to 3.25% to combat worries over inflation.


[R]09:00AM Stock futures pointed to a flat start.[/R]
Stock market futures indicated a flat market opening, a day after the Dow Jones Industrials hit a record high. Strong retailers'' September sales helped offset a rebound in crude-oil futures amid OPEC''s decision to reduce production. On Thursday, OPEC decided to cut output by a million barrels a day, sending crude futures above the $60 a barrel to $60.52.

Overall, same-store sales advanced by 3.8%, or up 5.1% excluding Wal-Mart Store. Wal-Mart (WMT: chart) said September sales rose at 1.3%, while total sales increased 12% to $31.21 billion. Target (TGT: chart) posted same-store sales increase of 6.7%, exceeding estimates of 5% growth. Costco Wholesale (COST: chart) reported a 4% same-store sales rise, slightly below analyst expectations. Starbucks (SBUX: chart) posted a better-than-forecast 6% monthly sales increase. Starbucks shares rose 5.1% in pre-open trading, while Costco shares fell 1.2%.

In economic news, the U.S. Labor Department said initial claims for state unemployment insurance fell 17,000 to 302,000 during the week ending Sept. 30. S&P 500 futures slipped 0.50 of a point at 1,357.80, while Nasdaq 100 futures rose 0.50 of a point at 1,693.00 Dow industrial futures eased 4 points to 11,902.

[R]Initial jobless claims fell steeper-than-expected.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 30. The report showed that jobless claims fell much more than economists had been expecting. The report showed that initial jobless claims fell to 302,000 from the previous week''s revised figure of 319,000. Economists had expected jobless claims to edge down to 315,000 from the 316,000 originally reported for the previous week. The Labor Department also said that the less volatile 4-week moving average fell to 313,500 from the previous week''s revised average of 316,250. The report also showed that continuing claims in the week ended September 23 rose to 2.448 million from the preceding week''s revised level of 2.433 million.


[R]7:30AM Record close for the Nikkei in Japan boosts Asian markets.[/R]
Asian markets finished higher on Thursday. The Nikkei Average of 225 companies closed with a gain of 2.3% to 16,449.3. Shares of office-equipment and digital-camera maker Canon rose 4.4% after the Nihon Keizai business daily reported the group will lift its 2008 production goal for digital-camera shipments by 13% to 26 million units.

Shares of Toyota advanced 1.7%, while Sony Corp fell 0.3% as investors struggled to digest a recent spate of bad news regarding its electronics division. Toshiba Corp plunged 5.2% on concerns related to its financial burden in the acquisition of U.S. nuclear-utility manufacturer Westinghouse Electric Co.