Advancers

The news from RBS cheered the rest of the banking sector. HBOS gained 2.1%, while Lloyds TSB moved up 1.8% and Barclays added 1.1%. Housebuilder Persimmon was among the biggest FTSE 100 advancers. Its shares gained 3% after Merrill Lynch reiterated its buy recommendation.

Persimmon was not the only housebuilder in focus. Barratt Developments added 4.2%, while Bovis Homes added 2.6% and Redrow put on 2.7%. Redrow and Bovis look particularly vulnerable to a bid from either Persimmon, Barratt or George Wimpey, up 1.6%.

Anglo American rose 1.5% on rumours Larry Yung, the third richest man in China, is looking to add to his 1.1% holding in the mining company. Legal & General firmed 0.8% after Deutsche Bank upgraded the insurer from hold to buy and lifted its price target.

Decliners

Land Securities drifted 1.2% lower, while Vedanta Resources eased 1 % as they both traded with entitlement to their latest dividend payments. ITV slipped 0.9% after cable company NTL announced it had no plans to make an offer for the commercial broadcaster.

Shares in JJB Sports lost 2.2% as UBS cut its recommendation on the sporting goods retailer from buy to neutral but raised its price target.

[R]7:30AM Asian stocks ended higher Wednesday with Japan breaking losing streak.[/R]
Asian markets fiished mostly higher on Wednesday. Japanese benchmark Nikkei 225 stock index advanced 0.65% to close at 16371.28. Mizuho Trust Banking gained 0.37% and Nippon Sheet Glass surged 7.33%.Gainers included tire manufacturer Bridgestone, which rose 3.4% after it announced plans to acquire U.S. tire company Bandag. Electric-power provider J-Power also firmed, rising 4.5%.

In Hong Kong, the Hang Seng Index rose 0.43% to 19026.36. Fixed-line operator China Netcom soared 6.2%, China Unicom gained 1.9%, and China Mobile added 1.3%. Large-cap Hutchison Whampoa, which operates one of the largest 3G networks in the world, rose 2.7%, on expectations the company will also have new opportunities after the launch of 3G in China.

Key mining stocks lifted Australian benchmark share index, with merger-and-acquisition activity also winning investor attention in the media sector. The benchmark S&P/ASX 200 index advanced 0.74% to end at 5466.7. BHP Billiton added 1.5% and Rio Tinto gained 2%, encouraged by record highs for nickel and lead on the London Metals Exchange overnight, a six month high for aluminum and support for copper and zinc.

In Taiwan, the Weighted Price Index of the Taiwan Stock Exchange rose or 1.1% to 7693.33, its highest closing level since finishing at 7785.62 on Sept. 5, 2000. Household appliance vendor Tatung, also a major land owner, soared by the maximum daily limit of 7%, its highest closing in over four years. AU Optronics, the world third-largest maker of liquid-crystal display panels by revenue, added 2.3%.

In Korea, the Korea Composite Stock Price Index, or Kospi, closed down 0.5% at 1413.73 after hitting an intraday low of 1399.68. Hyundai Heavy Industries fell 2.7%, Samsung Heavy Industries lost 2.1% and Daewoo Shipbuilding & Marine Engineering fell 2.8%.

[R]6:30AM European markets advance modestly on Wednesday on banks.[/R]
European stocks were higher on Wednesday. By mid morning, the FTSE 100 in London climbed 0.2%to 6,099.9, Frankfurt Xetra Dax was fractionally higher at 6,372.75, and the CAC 40 in Paris gained 0.1%to 5,363.43.

Advancers

Anglo Irish Bank gained 3% after reporting a better-than-expected 38% rise in full-year pre-tax profit and gave a bright outlook on its future prospects. Domestic rival Allied Irish Banks was boosted by the news, up 2.4%, while Bank of Ireland rose 1.4%.

Royal Bank of Scotland rose 3.4% after delivering a pleasing trading update, forecasting full-year 2006 profits ahead of market expectations thanks to strong organic income growth. Other UK banks were also higher. Lloyds TSB gained 1.7% and HBOS added 2.4%.

Decliners

IT services group Capgemini shares dropped 3.4% after it said it is going to issue 10.4 million shares worth 455 million euros ($606 million) to give it room to maneuver and participate in possible future industry consolidation.

ITV shares slipped 0.4% after NTL Inc said it has no present intention of making an offer for ITV, the U.K. commercial broadcaster. In a statement, NTL said a deal between itself and ITV is unlikely to be attained on terms acceptable to NTL.

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