Market rises on telecoms and US trade

A ROBUST performance from telecoms major Vodafone and buoyant early trading on Wall Street helped push the London market slightly ahead yesterday.

The FTSE 100 index closed just over 7.6 points higher at 5,710.66, and is now more than 5 per cent up in 2010 following its 21 per cent rise last year.

US markets gained more convincingly as figures confirming another rise in American consumer spending last month helped lift America's Dow Jones Industrial Average 0.5 per cent by the time London closed.

While the news of a 0.3 per cent rise in consumer spending across the US last month marked a slowdown on the 0.4 per cent seen in January, investors saw the growth as respectable.

City traders, meanwhile, said investors' fears over the global recovery have also been calmed by last week's European rescue plan for debt-laden Greece.

Michael Hewson, analyst at CMC Markets, said sentiment was also helped by ratings agency Standard & Poor's deciding not to change the UK's triple-A status ahead of the general election.

Among stocks, Vodafone, one of the biggest swing-stocks in the blue-chip index, was the second biggest riser. The telecoms giant rose 3 per cent, or 4.45p, to 151.15p on speculation it may see the restoration of dividend payments at Verizon, the US mobile phone operator in which it owns a 45 per cent stake.

The mobile phone sector is expected to remain in sharp focus ahead of an imminent report from regulator Ofcom on the amount networks can charge other providers.

In a busy week for Ofcom reports, the watchdog gave ITV a shot in the arm yesterday after it proposed scrapping some advertising airtime rules for commercial broadcasters, which could allow them to raise prices.

ITV rose 3 per cent in the FTSE 250, up 1.9p to 60.6p, with shares also supported by Royal Bank of Scotland lifting its price target on the stock and saying it believed the advertising cycle had turned.

Back in the top flight, a clutch of mining stocks led gains, with Xstrata being the day's top Footsie riser, up 38.5p at 1,231.5p, while Lonmin lifted 50p to 2,105p.

The session saw the debut of a major new company following the demerger of TalkTalk Telecom from Carphone Warehouse.

TalkTalk – the UK's second biggest broadband firm behind BT, with more than four million customers – is valued at more than 1.2 billion after its shares debut saw them rise 5.5p to 132p.

The split leaves Carphone Warehouse with a market value of 620m following the demerger and its 50 per cent stake in Best Buy Europe and a 47.5 per cent stake in Virgin Mobile France.

Carphone Warehouse closed the session up 10.5p to 155p.

Elsewhere, British Airways entered a holding pattern, the shares down 0.5p to 251p against the backdrop of cabin crew strike.

Banks were off-colour. Royal Bank of Scotland fell 1.7 per cent, or 0.81p, to 44.78p. Lloyds was down 1.25 per cent, or 0.8p, at 63.25p, while Barclays eased 0.7p to 366.85p and HSBC edged down 3.7p to 684p.

However, Joshua Raymond, market strategist at City Index, said the market might now tail off a bit. "We're now getting to the point where people are saying we have had some terrific gains and maybe we have come a little bit too far too soon," he said.