Connect to share and comment
* FTSE 100 up 0.3 percent
* Vodafone rises on Verizon sale talk
* Miners weaken, caution ahead of China data
By Tricia Wright
Jan 8 (Reuters) - Britain's top share index moved back up on
Tuesday towards recent two-year highs, helped by gains from UK
market heavyweight Vodafone.
Vodafone firmed 2.6 percent, adding almost 8 points to the
UK benchmark, after its partner in U.S. joint venture Verizon
Wireless said it would be "feasible" to buy out the British
firm's stake in the business in what would be one of the biggest
corporate deals ever.
Verizon Communications Chief Executive Lowell McAdam
told the Wall Street Journal "we have always said we would love
to own all of that asset", which is 55 percent owned by Verizon
Communications and 45 percent by Vodafone.
"There has been much negative news on VOD given the tough
outlook for European telecoms ... due to the macro environment
but forward looking we see (it retesting) 191 pence," Atif
Latif, director of trading at Guardian Stockbrokers, said.
"Should (Verizon Communications) make a move on the 45
percent stake, we see value on a standalone basis, and with the
shares offering a prospective yield of 7 percent coupled with
the defensive nature of the company we see the current valuation
Trading volume in Vodafone was robust, at 88 percent of its
90-day daily average.
The FTSE 100 was up 16.00 points, or 0.3 percent, at
6,080.58 by 1213 GMT, resuming a rally which took it to its
highest closing level since early February 2011 on Friday,
having slipped on Monday for the first time this year.
"It's looking good ... it's gaining ground and holding that
ground - that's got to be encouraging," Barclays Capital's chief
European technical strategist Phil Roberts said.
"We're coming up now to the February 2011 high (6,105). I
think it's going to break that ... after that you've got to
start thinking about the 2007 highs (6,754)."
Heavyweight mining stocks weakened before
economic data releases this week and next from China, the
world's top metals consumer, including fourth-quarter GDP.
Societe Generale, in a note, said it reckons a hard landing
in China remains a real risk despite recent signs of economic
SocGen recommends playing this possibility by selling
European miners, as well as the tech hardware and personal goods
sectors - which also have high exposure to Asia - while buying
into media and food retail.
Investors were also cautious before the fourth-quarter U.S.
earnings season which, as usual, kicks off with figures from
aluminium firm Alcoa after the London close on Tuesday.
(Reporting by Tricia Wright; Editing by Ruth Pitchford)