The London market started the week on the front foot, driven by the surprise announcement that UK tech firm ARM Holdings had agreed to sell itself to Japanese rival Softbank for £24bn ($31bn, €28bn) .

The Cambridge-based firm, which designs microchips used in Apple and Samsung smartphones, saw its shares surge by 50% adding more than £8bn to its share price.

The FTSE 100 Index lifted 22.6 points to 6692, with ARM's share price rise accounting for the majority of the top flight's gains. The FTSE 250 index rose 137.9 points to 16865.1.

Trustnet Direct market analyst Tony Cross said: "Although Arm has been seen as a prized asset for some time it's difficult to overlook the fact that the big swing in the pound and Japanese yen over the last year has left the company looking attractively priced for Japanese investors."

In afternoon trading the biggest risers in the FTSE 100 Index were ARM Holdings (+503p to 1692p), Sage Group (+17p to 669.5p), RSA Insurance (+11.3p to 489.6p), Marks & Spencer (+7p to 332.3p) and Royal Bank of Scotland (+3.9p to 187.9p).

London stock exchange
ARM Holdings £24bn deal lifts the FTSE 100 IndexGetty

The biggest fallers in the FTSE 100 Index were BHP Billiton (-25p to 971.5p), TUI (-22p to 939.5p), Lloyds Banking Group (-1.2p to 54.8p), Anglo American (-11.2p to 824.9p) and BP (-6p to 451.2p).

In afternoon trading the biggest risers in the FTSE 250 Index were Supergroup (+100p to 1617p), Sophos Group (+13.9p to 229.2p), Polypipe Group (+14.4p to 241.4p), Allied Minds (+19.7p to 369.7p) and Victrex (+68p to 1601p).

The biggest fallers in the FTSE 250 Index were N Brown Group (-9.7p to 175.1p), Sports Direct International (-6.1p to 254.4p), Thomas Cook (-1.4p to 62.4p), Tullow Oil (-4.9p to 223p) and Polymetal International (-23p to 1093p).

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