FTSE jumps as bid talk fuels British Energy

By Rebekah Curtis

LONDON (Reuters) - The FTSE 100 index .FTSE rose 1 percent on Friday, as bid talk boosted British Energy BGY.L, but banks capped gains and surprisingly weak U.S. jobs data signalled more cracks in a struggling U.S. economy.

British Energy jumped 7.3 percent after France's La Tribune newspaper said on its Web site that EDF's (EDF.PA) board had given the go ahead to launch a takeover bid for the UK firm.

British Energy declined to comment, while EDF reiterated it planned to take part in the development of nuclear power generation in Britain.

The FTSE 100 .FTSE closed up 55.8 points or at 5,947.1, as stocks edged higher across Europe. The UK benchmark index has risen more than 4 percent over the past week, but is still down nearly 8 percent so far this year.

Wall Street was little changed, with sentiment ailing after data showed the U.S. economy lost more jobs than expected in March and the unemployment rate rose to its highest in 2-1/2 years.

Beaten-down banks ended widely lower, with traders pointing to persistent credit worries and profit-taking. Lloyds TSB (LLOY.L) shed 1.1 percent and Alliance & Leicester ALLL.L lost 0.5 percent.

"Any day when the market's up it's only because people are getting less bearish rather than anyone's getting bullish," said Graham Secker, UK equity strategist at Morgan Stanley.

"Markets don't go down in a straight line."