FTSE ends the day flat as Vodafone gains fail to make up for oil gloom
BRITAIN’S blue-chip share index closed flat yesterday, as banks gave up gains after rising yields at a Spanish debt auction unnerved investors, but Vodafone outperformed on expectations it will make a bid for Cable & Wireless Worldwide.
Vodafone, the world’s biggest mobile phone carrier by revenue, added five points to the index by the close, gaining 2.5 per cent, after the group was given an extended deadline to make a bid for Cable & Wireless after rival bidder Indian telecom group Tata Communications walked away.
Shares in CWW closed the day down 8.2 per cent as hopes of a bidding war evaporated.
Broader sectoral gains on the index were limited, however, with pharmaceuticals and defence stocks some of the better performers while banks erased gains after the Spanish auction, which saw yields rise and heightened fears Spain will struggle to keep its fiscal house in order.
Hargreaves Lansdown was the biggest percentage gainer on the index, up 5.6 per cent after the investment manager said in a statement its assets under management increased by £2.6bn to £26bn in the first quarter.
The FTSE 100 index closed around flat, or down 0.74 points, at 5744.55, but is still heading for its largest weekly gain since early February.
“It is a very twitchy session, there is a little bit of a gain but I think the market expected to make a bit of consolidation, we will be buying the dips,” said Ed Woolfit, head of trading at Galvan, who expects the index to push through the 6,000 level.
Another market bull, technical analyst Dominic Hawker at PH Partners, expects the FTSE to reach 6,100 in the near term. “I think the FTSE has found good support above the October / November base formation at 5,600 and technically there is an uptrend from the August lows, so the rally is off a good level of support,” Hawker said.
“In stock terms, there are an expanding number of shares developing short-term uptrends, so the market is broadening out again, with miners and the banks both reaching reasonable support levels.”
Investors are increasingly looking to meetings of the G20 economies and the International Monetary Fund for signs of progress on a deal to increase the amount of money available to fight the Eurozone crisis.
IMF chief Christine Lagarde is hoping to secure at least $400bn in commitments from finance officials from around the globe, who meet this week in Washington under the auspices of the Group of 20 nations and the IMF and World Bank.
Oil and gas stocks also weighed on the market, dropping 0.9 per cent led by a 1.1 per cent fall in Royal Dutch Shell.
Shares in GlaxoSmithKline rose 1.3 per cent as Britain’s biggest drugmaker launched an unsolicited bid, worth around $2.6bn for its long-time US partner, Human Genome Sciences.
The FTSE 100 and the FTSE 250 indexes ended virtually flat on the day.
Home Retail Group, which owns the Argos chain, shed 4.1 per cent as Bernstein Research started coverage of the firm with an “underperform” rating in a cautious review of the European general retail sector.