Morning Markets: FTSE buoyed by BA deal

The FTSE was up 40.81 points (0.84%) to 5,185.53, buoyed by news of a tie-up between British Airways and American Airlines.

BA rose 4.9% as investors welcomed plans by the US government to approve a link up between the troubled carrier and American Airlines.

Mining shares also rose in early trade, with Rio Tinto up 2.14% to 1026.50p and Kazakhmys climbing by 1.84% to £12.76. Meanwhile, Barclays Bank climbed 1.6% to 265.70p ahead of its annual results on Tuesday.

IT firm ARM Holdings was the biggest loser, down 0.56% to 196.30p, followed by ICAP, which fell 0.12% to 328.90p

In the US the Dow closed down 45 at 10,099.14 following the surprise move by the Chinese authorities to lift the reserve requirements for its banks by half a percentage point.

Metals-related stocks bore most of the brunt from the Chinese government's decision, with aluminium producer Alcoa down 2.21% to $13.28.

The main Nikkei index closed down 78.89 points at 10,013.30 on Monday despite the release of figures showing the Japanese economy grew by 1.1% at the end of 2009.

Shares in Toyota fell 3% after the carmaker said on Friday it would recall another 8,000 vehicles in the US.

Shinsei Bank dropped nearly 6% and Aozora Bank lost nearly 4% after it was reported the two would not merge in October as planned.

Dubai's stock market fell 3.5% after a report said the government's investment vehicle Dubai World may offer only 60 cents on the dollar to creditors.

The company denied the Dow Jones report but the DFMGI index saw its biggest drop in three weeks.