A RAFT of robust corporate results underpinned a strong day of trading in London, helped by resurgent oil price that continued Friday's climb for much of yesterday.

Heightened tensions over Iran pushed Brent crude prices 53c higher in early trading to $61.41 - close to its 2007 high - and drew the spotlight onto oil giant BP as well as Cairn Energy. BP, in the words of one analyst, "has been the underperformer in its sector for one full year'' and could be starting to look better value. The shares rose 10 to 545p.

Oil prices dropped back but Cairn Energy also put on 30p to pounds 16.30. BG Group, with smaller oil interests, enjoyed a rise of 12 to 730p.

Energy companies were to the fore on a day when US power company TXU agreed to a record $44bn ( pounds 22.5bn) takeover by private equity groups Kohlberg Kravis Roberts and Texas Pacific. Scottish & Southern Energy and International Power both gained on consolidation talk.

"The TXU bid in the US gives more focus on them as a possible bid target again,'' one trader said.

International Power, shares in which rose 5 to 384p, may also be a beneficiary of TXU's new owners' reported plans to cancel the building of eight coal fired power plants in Texas. International Power has two gas plants in Texas that account for 50p a share enterprise value. SSE shares were 30p higher at pounds 15.18.

Mining shares were also in demand as copper prices rose 1.2pc to $6,345 a tonne and nickel put on 0.8pc to $41,300 a tonne. Kazakhmys gained 22p to pounds 11.95, Anglo American put on 22 to pounds 26.30 while Xstrata improved 11p to pounds 26.56.

Corporate reporting season has been widely encouraging with better than expected performance from many quarters. Housebuilder Persimmon, 49p stronger at pounds 14.73, and insurer Old Mutual Securities, 6 firmer at 187p, led the FTSE 100 after topping full- year forecasts. An upbeat tradings statement ahead of the interim figures carried Associated British Foods shares to the top of the FTSE 100, up 37 to 845p. Among the smaller caps, recruitment group Robert Walters posted "stunning'' results, Altium Securities said. Profits before tax rose 56pc to pounds 19.8m, capping a year in which the shares have almost doubled to 378p, albeit down 7 on profit taking yesterday.

Analysts upgraded their forecasts and the positive sentiment carried through to Michael Page, whose shares jumped 16 to 526p.

Distribution and packaging group Bunzl also surged to the top of the FTSE 250 after strong results. Pre-tax profits rose 7pc to pounds 190m despite the exchange rate constraining growth by 1.4pc as more than half the business is generated in dollars. The group said it was looking at acquisitions around the world and the shares climbed 21 to 684p.

Jeremy Batstone, head of research at Charles Stanley, said: "The company reporting season seems to be progressing positively, with companies making generally favourable noises regarding the outlook.

"An attempt on 6,500 and maybe even in due course the all-time high is not inconceivable. The market has got some momentum behind it. Our view is that shares are somewhat overbought but not overvalued.''

The FTSE 100 edged closer to Mr Batstone's target, closing 33.2 points higher at 6434.7. The FTSE 250 gained 12.4 to 11612.

Expectations of better-than-expected results this week from online gaming groups PartyGaming and Sportingbet underpinned shares in both. Despite what traders said was a placing by Morgan Stanley of 123m shares in PartyGaming via a bookbuild process, with a range of 39p-40p, the gaming group's stock was unchanged at 39p. Sportingbet shares jumped 2 to 43p.

Property groups were among the main fallers after Hammerson, warned along with its full-year results that the upward shift in valuations had run its course. British Land fell 21p to pounds 15.94, Slough Estates was 7 lower at 784p and Minerva was off 13 at 401p. Hammerson firmed a penny to pounds 16.19.

The FTSE 250's largest faller was Alfred McAlpine. Shares in the support services group plunged 137 to 476p after it discovered an accounting error in its slate business.

PayPoint, the cash and internet payments group, also failed to impress with a pounds 12m acquistion of SECPay, a fast growing processor of card payments for goods bought over the internet. It offers more than 3,500 online retailers a choice of any UK acquiring bank for authorising debit and credit card transactions. PayPoint shares fell 12 to 610p.

Elsewhere, EMI shares gained another 4 to 246p among speculation that buyout firms are circling the troubled music group as well as Warner Music.

First Choice lost a major shareholder. Barcelo Corporacion Empresarial confirmed it has sold its entire 6.15pc holding. First Choice is still reeling from MyTravel's merger with Thomas Cook, which could see it struggle to sell its package holiday business. First Choice shares were resilient, climbing 2 to 264.

City Trader

Aurum Mining raised pounds 30m yesterday in the largest share sale for a mining company on the Alternative Investment Market so far this year.

The new funds triple the former shell company's market cap and will be used to develop its Andash gold and copper mine in northern Kyrgyzstan.

Aurum was established in 2005 as a speculative play on the gold reserves in the former Soviet republic, which granted the company a exploration license last year that then sent the shares soaring.

Gold prices are approaching a 24-year high at $685 an ounce and the mine, which is thought to contain at least 1.1m ounces of gold and gold equivalent, is expected be low cost - increasing the profit margin.

It is expected to start producing next year.

The shares rose 7 to 124.5p after the successful placing, arranged by Arbuthnot. It came amid criticism of AIM's controls and the quality of stocks listed on the junior market, but investors shrugged off the concerns and the listing was oversubscribed. UK institutions were the principal buyers.

TESCO's sale

Tesco is issuing pounds 500m worth of 50-year bonds, the longest- ever maturity for securities issued by Britain's biggest supermarket. The bonds carry a 5.2pc coupon and a spread of 117 basis points over Treasury 4.75pc 2056.

The issue is designed to cater to surging demand from pension funds.

Last year, the Government sold its first 50-year gilts in 40 years. A total of pounds 14bn worth of such gilts have now been issued. Tesco is not the first corporate to get in on the act. About pounds 4.5bn of corporate bonds of 50 years or more have already been sold.

Tesco will increase that to pounds 5bn and the issue may encourage further corporate offerings. There are very few companies in which investors would buy such long term debt but Tesco has 31pc of the UK grocery market.

Moody's also ranks Tesco's debt A1 while Standard & Poor's and Fitch Ratings rank it A+. The shares rose by 2 to 448p.

The fixed-rate bonds were sold by Barclays Capital, Deutsche Bank and JPMorgan Cazenove.

Fund managers expect there to be significant demand from pension funds, which are buying longer-dated bonds to cover payouts to policyholders as the average age and life expectancy increase.Lunchtime stock market report on: www.telegraph.co.uk/ business

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