After a 2.6% slump last week, the FTSE 100 was trading 0.5% higher at 6,720 in early trading.

Equity markets experienced a sharp sell-off last week after it emerged that the parent company of Portugal’s second-largest bank, Banco Espirito Santo, had missed a debt payment, sparking contagion concerns across the rest of the single-currency region.

Meanwhile, concerns about high valuations after the recent rally and ongoing geopolitical tensions in the Middle East prompted investors to scale back risk, sending the FTSE 100 to close to a three-month low of 6,672.37 on Thursday.

“Investors are looking ahead more positively to the new week though, hoping major data releases from Europe, the US and China can restore confidence and put last week’s woes behind them. Japan has already helped out with upward revisions to its May industrial production prints,” said Mike van Dulken, Head of Research at Accendo Markets.

Shire gives tentative thumbs up to latest AbbVie offer

Shares in pharmaceutical group Shire rose strongly today after the company said it would be willing to recommend a revised proposal from US rival AbbVie to shareholders. The bid proposal, which comprises £24.44 in cash and 0.8960 AbbVie shares per Shire share, followed further recent discussions between the two groups. Based on the July 11th share price, Abbvie’s offer has a value of £53.20, equal to around £31bn.

Updates from the Farnsborough airshow were also giving airlines and aerospace engineering stocks a lift this morning, including Rolls-Royce, IAG and easyJet.

Rolls-Royce pleased investors with the announcement that Airbus had selected the newly launched Trent 7000 engine as the exclusive engine for the new Airbus A330neo.

IAG gained after saying it has order 20 Airbus 320neo aircraft, which will “provide both cost savings and environmental benefits”.

easyJet was also in demand as it selected CFM International to provide 270 engines to power its 35 ordered Airbus current generation A320 aircraft and 100 Airbus new generation A320neo aircraft.

Leading the fallers were precious metal producers Fresnillo and Randgold as gold and silver prices declined.

AVEVA, which provides engineering data and design IT systems, reiterated its full-year guidance but reported a soft first quarter, in which it was hit by negative currency movements and the seasonal timing of contracts.

FTSE 100 – Risers
Sports Direct International (SPD) 719.50p +3.08%
Shire Plc (SHP) 4,996.00p +2.59%
Tesco (TSCO) 283.80p +2.05%
Rolls-Royce Holdings (RR.) 1,053.00p +1.54%
Aviva (AV.) 497.10p +1.45%
Experian (EXPN) 1,035.00p +1.37%
GKN (GKN) 356.30p +1.31%
Petrofac Ltd. (PFC) 1,176.00p +1.29%
Weir Group (WEIR) 2,665.00p +1.14%
BHP Billiton (BLT) 1,982.00p +1.07%

FTSE 100 – Fallers
Barclays (BARC) 206.35p -0.75%
Burberry Group (BRBY) 1,443.00p -0.62%
Persimmon (PSN) 1,237.00p -0.40%
BG Group (BG.) 1,183.50p -0.29%
Meggitt (MGGT) 492.30p -0.28%
Imperial Tobacco Group (IMT) 2,733.00p -0.26%
Land Securities Group (LAND) 1,018.00p -0.20%
Pearson (PSON) 1,085.00p -0.18%
3i Group (III) 381.70p -0.18%
Smith & Nephew (SN.) 1,019.00p -0.10%