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Euphoric FTSE boosted by talk of Vodafone US deal

(Update) The FTSE 100 extends its gravity defying run boosted by a report that Vodafone could merge with US partner Verizon.

 
Euphoric FTSE boosted by talk of Vodafone US deal

Stock markets continued their gravity defying run boosted by the US Dow Jones Industrial Average closing at an all-time high overnight.

The FTSE 100 gained 23 points or 0.3% to 6,455 spurred on by a report that Vodafone (VOD.L), up 6% or 10.25p to 178.8p, was in merger talks with Verizon Communications, the US telecoms company with which it shares the US mobile phone joint venture, Verizon Wireless.

According to Bloomberg, Verizon is considering a range of options from severing all ties with Vodafone, which is led by Vittorio Collao (pictured), to a full merger with the Newbury-based company.

Sentiment was further boosted by the Halifax House Price Index showing UK property prices rose 0.5% last month and by 1.9% in the three months to the end of February compared to a year ago.

In Europe the Euronext 100 index firmed 1.7 points or 0.2% to 716, with the German Dax advancing 1% or 77 points to 7,947 and the French Cac 40 gaining 0.3% or 11 points to 3,798.

On currency markets both the pound and the euro dipped against a stronger dollar, at $1.5110 and $1.3051 respectively. The euro strengthened 0.13% to 86.38p against the pound

Gold edged down to $1,575.43 an ounce.

Insurers hike dividends by a fifth

Melrose (MRON.L) raced 5.4% or 14p higher at 274p after the engineering takeover specialist’s full-year profits jumped 38%, helped by its purchase last year of Elster in Germany.

Admiral (ADML.L) gained 4.9% or 62p to £13.29 after the car insurer reported a 15% rise in full-year profits and raised its total dividend by 20% to 90.6p per share.

Life insurer and savings group Legal & General (LGEN.L) gained 1.5% or 2.4p at 165.2p as it too hiked its total dividend by 20% to 7.65p per share. The payout surprised analysts given operating profits rose 3.2% to £1.09 billion, helped by strong annuity sales. The company is seeing the benefit of a growing savings culture in the UK, encouraged by the recent ‘auto enrolling’ of workers into company pension schemes.

Tesco (TSCO.L) added 2% or 7.4p to 379.5p after Credit Suisse upgraded the UK’s largest supermarket group to ‘outperform’ from ‘neutral’ and raised its target price for the shares to 430p.

Wood Group (WG.L) advanced a further 2.5% or 20.5p to 838.5p after HSBC raised the energy services company to ‘overweight’ from ‘neutral’ and increased its target price to 900p from 790p. Wood Group was a big riser yesterday after declaring a 35% rise in full-year profits, helped by the boom in US shale gas.

Cape (CIU.L), the struggling building services supplier to energy firms, jumped 7.3% or 17.15p to 250.15p after revealing full-year profits had slumped by two thirds due to problems in Algeria and Australia.

Mulberry (MUL.L) shot up 6.2% or 81p to £13.81 after the Daily Mail reported speculation that the luxury fashion group could draw a bid from Hermes of France.

Imperial Tobacco (IMT.L), a classic defensive stock, was the biggest faller on the FTSE 100, down 2.2% or 55p at £23.88.

Tui Travel (TT.L) fell 2.2% or 7.1p at 307.6p as its Thomson Airways unit said it had received no delivery date from Boeing for its first 787 Dreamliner jet. The jets have been grounded as investigators examine the causes for a number of engine fires. Tui said customers would be switched to older Boeing 767 planes.

CPP Group (CPPG.L), the credit card insurer that was fined for mis-selling last year, slid 10.2% or 1.8p to 15.5p after Sky News reported the company was in talks with its lenders over debt for equity swap. This values the company at £26 million.

See our FTSE data pages for the day's other risers and fallers.

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Aviva: is Friends bid a rights issue in disguise?

by Gavin Lumsden on Nov 24, 2014 at 15:04

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