Merger speculation pushed London shares higher on Thursday.

The FTSE 100 index of leading shares ended up 72.6 points to close at 5827.9, although trading was very thin.

Hopes of a mega-merger between US oil groups Exxon and Mobil buoyed stock prices.

BP gained 23½p to 956½p and Shell gained 14¼p to 367½p.

Investors in brewing stocks were also celebrating as shares rose on hopes of a series of deals in the sector.

Wolverhampton & Dudley Breweries £262m hostile takeover bid for rival Marston, Thompson & Evershed caused excitement in the sector.

Marston's shares gained 17% to 287.5p.

Shares in Bass rose 60p to 850p, Whitbread was up 35p at 825p and Scottish & Newcastle rose 17p to 743p.

Shares in Marks & Spencer fell 24.5p to 421p following its announcement that chairman and chief executive Sir Richard Greenbury had succeeded in holding on to the chairmanship of the company.

With Wall Street shut for Thanksgiving it was a quiet day's trading.

The Confederation of British Industry said the British economy would steer clear of recession but that order books were now at their lowest levels in its monthly survey since 1992 and that the manufacturing recession was 'increasingly likely'.

Neil Parker, Treasury economist at The Royal Bank of Scotland, said the November monthly trends enquiry "makes for depressing reading". However analysts expected the warning.

Worries remained about the extremely low prices of crude, however.

Sainsbury's has paid £294m for a US retail chain.