UK stocks surged on Tuesday, starting the week strongly after the four-day Easter weekend, as increased M&A activity and a strong reading of US factory orders lifted sentiment.Telecoms giant Vodafone was among the risers on London's benchmark index on the back of speculation that it could be the target of the biggest takeover deal on record.Better-than-expected factory orders Stateside boosted stocks on Wall Street today, as US markets rebounded after manufacturing figures disappointed on Monday (US financial markets were among the few to be open yesterday). Factory orders in the States rose 3.0% in February, above the 2.9% increase expected, and recovering after January's 2.0% drop. Economic data this side of the Pond early on was less cheery however, as manufacturing purchasing managers' indices (PMIs) in the Eurozone and the UK both remained below the key 50.0-point threshold that separates growth from contraction."Equity markets opened higher this morning and have largely pushed on throughout the session as traders nudge risk assets higher following the Easter break," said Alex Young, a Senior Sales Trader at CMC Markets. "Mixed PMI numbers from the UK and Europe were largely ignored as positive sentiment drove the gap between equity valuations and macroeconomic data ever wider," he said.FTSE 100: M&A speculation boosts VodafoneVodafone's shares surged following reports that Verizon and AT&T were working on a break-up bid for the British firm. The two US telecoms groups are said to be considering a deal that would see them pay a 40% premium to Vodafone's share price at Monday's close, sources told FT Alphaville. It would put Vodafone's enterprise value at $245bn, making it the biggest merger and acquisition in history.easyJet was gaining ahead of its pre-close first-half trading update due Friday. The company is expected to show a jump in figures on the back of the bad weather in the UK. Heading the other way was the mining sector, which was under pressure as metals prices declined. Meanwhile, less-than-impressive figures on Chinese, Eurozone and UK manufacturing over the last day or two have weighed on sentiment. Steelmaker EVRAZ was among the worst performers after announcing this morning that it has signed an agreement to buy a majority stake in the OSJC Timir iron ore project in Russia for $160m. Sector peers ENRC, Antofagasta, Randgold Resources, Vedanta and Anglo American were all lower. Shares in engineering group IMI were also lower after Goldman Sachs cut its rating on the stock from 'buy' to 'neutral', saying that it is no longer materially mispriced after its strong re-rating.FTSE 250: FirstGroup, ICAP lead the risersFirstGroup, the bus and train operator, surged today after Bank of America Merrill Lynch upgraded it from 'underperform' to 'buy', saying that extensions to contracts and divestments could give the stock a boost.Inter-dealer broker ICAP was on the rebound after a recent profit warning. Giving it a boost was the positive readacross from NASDAQ OMX's deal to purchase the eSpeed unit from rival BGC Partners. Shore Capital said it was "positive for ICAP because it underscores the value inherent in its electronic broking assets."Specialist insurance group Hiscox was a big faller after Goldman Sachs reiterated its bearish view on the stock.FTSE 100 - RiserseasyJet (EZJ) 1,128.00p +4.44%Rexam (REX) 547.50p +3.79%Croda International (CRDA) 2,841.00p +3.57%Admiral Group (ADM) 1,374.00p +3.15%Experian (EXPN) 1,174.00p +2.98%Royal Bank of Scotland Group (RBS) 283.70p +2.98%International Consolidated Airlines Group SA (CDI) (IAG) 260.60p +2.92%Vodafone Group (VOD) 192.00p +2.89%SABMiller (SAB) 3,552.50p +2.55%Morrison (Wm) Supermarkets (MRW) 283.20p +2.53%FTSE 100 - FallersEurasian Natural Resources Corp. (ENRC) 235.30p -4.39%Evraz (EVR) 216.50p -2.48%Antofagasta (ANTO) 966.50p -1.78%Randgold Resources Ltd. (RRS) 5,590.00p -1.58%Vedanta Resources (VED) 992.00p -1.29%Anglo American (AAL) 1,674.00p -1.06%IMI (IMI) 1,282.00p -1.00%Shire Plc (SHP) 1,987.00p -0.85%Severn Trent (SVT) 1,700.00p -0.70%ARM Holdings (ARM) 916.00p -0.54%FTSE 250 - RisersFirstGroup (FGP) 216.10p +7.46%ICAP (IAP) 308.10p +6.09%Salamander Energy (SMDR) 218.10p +4.96%Regus (RGU) 166.50p +4.91%BBA Aviation (BBA) 269.00p +4.47%Ashtead Group (AHT) 609.00p +3.84%International Personal Finance (IPF) 461.20p +3.64%New World Resources A Shares (NWR) 228.10p +3.54%Morgan Advance Materials (MGAM) 292.20p +3.47%Berendsen (BRSN) 812.00p +3.44%FTSE 250 - FallersPetropavlovsk (POG) 204.90p -8.16%Hiscox Ltd. (HSX) 568.00p -7.92%Kazakhmys (KAZ) 369.50p -5.84%Ferrexpo (FXPO) 165.20p -4.56%Imagination Technologies Group (IMG) 477.30p -3.22%African Barrick Gold (ABG) 187.30p -3.00%Dixons Retail (DXNS) 33.13p -1.95%RPC Group (RPC) 390.00p -1.89%Savills (SVS) 533.50p -1.75%Enterprise Inns (ETI) 104.30p -1.70%BC