Banks have led FTSE 100 higher on reports of merger talks between Commerzbank (CBKG.DE) and Deutsche Bank (DBKG.DE), while closer to home, Charter Court Financial Services (CCFS) and OneSavings (OSB) confirmed they were in talks over a potential merger.
The UK blue-chip index climbed 61 points, or 0.9%, to 7,169 led by financials.
German investment bank Deutsche Bank has reportedly agreed to hold merger talks with rival Commerzbank.
On the FTSE 250, OneSavings jumped 9.8% to 406p while Charter Court rose 9.5% to 335.6p, as the challenger banks confirmed tie-up talks.
‘This is an all-share deal, no cash is changing hands, and on paper the businesses look to be a pretty good fit,’ said AJ Bell investment director Russ Mould.
‘Both are active in the specialist mortgage market and by joining up they will expect to achieve cost savings and potentially lower the cost of funding their business due to their increased scale.
The FTSE 100 also benefited from weakness in the pound ahead of another parliamentary vote on the Brexit deal this week, with sterling down to $1.298 against the dollar.
The FTSE 100's bounce followed a disappointing end to the week for markets, as poor US jobs data added to fears of global slowdown, with China and Germany also sharing worrying economic data on Friday. In February US non-farm payroll figures came in at just 20,000 versus expectations of 180,000.
Shares in Ocado (OCDO) edged 3.5p lower to £10.53, as The Times reported a survey showed almost a quarter of its customers might stop shopping with the online grocer if Waitrose products were not available. Ocado has announced an online deal with Marks & Spencer (MKS), which would see it replacing its current agreement with Waitrose.
Clothing retailer Superdry (SDRY) was among the mid-cap fallers, down 4.5p at 517.5p, as its board urged shareholders not to let its founder Julian Dunkerton back in as a director. The vote will take place on 2 April to decide whether Dunkerton and Boohoo (BOOH) chairman Peter Williams will be allowed on the board.
Fund manager Neil Woodford was dealt another setback by Kier (KIE), whose shares slumped 14.4% to 425.6p as the construction outsourcer reported an ‘accounting error’ which led to a higher debt forecast for 2018.