Shares in Rio Tinto were in demand yesterday after Citigroup talked up the chances of BHP Billiton making another bid.

The broker said that Rio, up 43p at £29.17, was still the deal that made most sense for BHP, up 3½p at £17.04, given potential cost savings, the quality of its assets and growth options.

Moreover, it said that BHP might make a move before the companies formally agreed a significant iron ore joint venture, using the negotiations to gain access to Rio’s data to confirm potential synergies of a takeover.

Citi added that many of the reasons that BHP had pulled out of buying Rio a year ago, such as the latter’s debt and wider market conditions, were no longer stumbling blocks.

The broker’s comments come before the expiry on November 27 of a Takeover Panel rule preventing BHP from making another bid for Rio.

The FTSE 100 rose 17.08 points to 5,142.72, despite American jobs data that was worse than expected, which in turn caused the index to stumble in early afternoon.

British Airways was the biggest riser, climbing 12½p to 198.8p, after the airline reported first-half results that were better than expected.

Royal Bank of Scotland also made ground, ending the day up 1.85p at 37.06p after third-quarter losses more than halved as bad debts shrank. Lloyds Banking Group was up 1.81p at 84.80p and Barclays, which reports figures next week, rose 4.15p to 336½p.

Segro was another big gainer, rising 7.1p to 345.8p, after the commercial property group sold its Great Western Industrial Park in West London for £110.4 million. Hammerson climbed 5½p to 414½p and Land Securities rose 13½p to 686½p. Great Portland Estates gained 10.9p to 259.7p after JPMorgan upgraded its rating on the property group to “buy”, from “neutral” after its recent bad run.

Rentokil Initial was the biggest faller, down 7p to 105p, despite the pest control-to-parcel delivery group reporting upbeat third-quarter results, which were slightly ahead of expectations. Numis warned that there was still much to be done in terms of restructuring.

Weaker oil prices weighed down producers such as Royal Dutch Shell, down 13½p at £18.07½, and BP, which fell 3.2p to 583.9p.

William Hill rallied 5½p to 179.3p after the bookie said that it would launch a £300 million corporate bond to pay down debt. The issue was more than four times over subscribed. Daniel Stewart reiterated its “buy” rating, saying that the stock should be trading above 200p. The broker also increased its Sportingbet price target to 92p from 80p, saying that the stock was likely to be part of sector consolidation once it settled a dispute with the US Department of Justice.

Salamander Energy rose 2.1p to 262p after it was well-received by investors. Oriel said that its drilling programme next year could be transformational.

Centamin Egypt rose 3¼p to 138p after the goldminer moved from AIM to the main market. The company has a bit of a fan club in the City and is seen as a potential takeover target.

• New York: Wall Street stocks edged up slightly in choppy trading as disappointing jobless figures rose to the highest in more than 26 years. At midday the Dow Jones industrial average was at 10,007.85, up 1.89 points.

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