Vodafone’s surge supports FTSE 100

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Vodafone helped keep Britain’s top share index close to its five-year highs yesterday amid reports of fresh negotiations with its American joint venture partner Verizon.

The pair are thought to have discussed options including ending the Verizon Wireless joint venture, a partial sale of Vodafone’s 45 per cent stake or a full merger of the two firms.

Richard Curr, head of dealing at Prime Markets, said: “If the Verizon stake – Vodafone’s main asset and Achilles’ heel – is sold off, it will provide the group with the firepower for further acquisitions and potential growth in emerging markets. ”

With analysts stressing that Vodafone’s hefty dividend made it a reasonable buy even if the talks came to nought, shares lifted 6.8 per cent to 180p.

The wider FTSE 100 spent most of the day ahead only to slip into the red late in the session as traders were tempted to cement some of the handsome profits of recent days. It closed down 4.31 points at 6,427.64, with construction giant CRH slipping more than 4 per cent at 1,450p as it went ex-dividend.

Aberdeen-based energy services firm Wood Group was still in demand following its results-day surge in the previous session – which helped it avoid a widely expected demotion to the FTSE 250 in the latest reshuffle. It added a further 35.5p or 4.3 per cent at 853.5p yesterday.

Imperial Tobacco shares were off 58p to 2,385p amid speculation that the UK government is planning to copy Australia with the introduction of plain packaging on tobacco products.

And Royal Bank of Scotland shares were down 3.7p to 309.1p after Bank of England governor Sir Mervyn King called it to be broken up into “good” and “bad” banks.

NEW YORK: The Dow closed modestly higher at another record last night as investors bet that favourable market conditions would continue, though the gains were slight.

The Dow Jones industrial average rose 42.47 points, or 0.30 per cent, to finish at 14,296.24 while the broader Standard & Poor’s 500 Index advanced 1.67 points, or 0.11 per cent, to end at 1,541.46. But the Nasdaq Composite Index dipped 1.77 points, or 0.05 per cent, closing at 3,222.36.