Update filed at 0930hrs

Ongoing rumours of further merger and acquisition activity in the technology sector was enough to send Autonomy Corporation to the top of the best performers’ list in early trading.

Britain’s largest software company – and sponsor of Tottenham Hotspur Football Club – was up 4 per cent at 1,696 pence as speculation gathered pace that one of the larger US firms was preparing to table a bid for the company.

BAE Systems was also making healthy gains by the second hour of trading after it confirmed a new order from the US government to upgrade 1,700 mine-resistant ambush-protected (MRAP) ‘Caiman’ vehicles.

The news supports BAE’s change in business model to generate additional revenue from servicing and maintenance contracts. Its share price rose 2.4 per cent to 309.3 pence.

Oil and gas group Petrofac completed the top three line-up, rising 2.2 per cent to 1,444 pence.

At the other end of the table, JP Morgan/Cazenove’s report on ARM Holdings was enough to send the UK chipmaker downwards after analysts said Intel’s purchase of Infineon’s wireless unit was not necessarily positive for the company.

The market responded and ARM lost ground, dropping 3.2 per cent to 362.2 pence.

African Barrick Gold was down 2.6 per cent at 601.5 pence while Fresnillo dropped 2.4 per cent at 1,092 pence.