FTSE 100 close: Vodafone moves for T-Mobile

 

Vodafone's reported interest in a bid for T-Mobile UK attracted attention in the top flight in an otherwise lacklustre session, with the FTSE 100 index closing ahead 53.02 points, at 4,294.03.

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'We're also seeing posturing amongst the miners as Anglo American tries to dismiss unwanted approaches from Xstrata,' said David Fineberg, Head of Trading Western at CMC Markets.

'Add to this the relatively buoyant start on Wall Street - the fact crude is back above $70/barrel certainly hasn't been lost on the oil stocks - and the London index is now marking a tentative return to territory above the key 4,300 level.

'We are however now slipping into the summer and although further acquisition talk stands to provide additional upside, the air of caution doesn't seem to be disappearing any time soon. '

Snapping up T-Mobile would give Vodafone 40% of the UK market by revenue, but this was not enough to inspire its share price, which edged 1.40p higher, or 1%, to 117.6p.

The lukewarm response came as analysts expressed doubt that a combination with T-Mobile UK would be able to escape the interest of regulators.

Lloyds Banking Group was 4.07p ahead to 70.56p after Goldman Sachs upgraded its rating to 'buy' from 'neutral'.

'Lloyds is ... the least expensive large cap bank in Europe,' Goldman says in a note.

The rest of the banking industry followed Lloyds' lead, with Royal Bank of Scotland up 0.88p to 39p and Barclays ahead 11.55p to 279.65p.

Shares in Admiral Group rose 27.5p to 883.5p after Credit Suisse raised its rating for the insurer to 'outperform' from 'neutral' with an unchanged target price of 1,097p.

Life and pensions firm Prudential recovered from weakness last week to add 23.5p to 422.75p. Legal & General climbed 1.14p to 57.15p.

In the second-tier, FirstGroup's pursuit of a possible merger with National Express boosted shares in its rival and caused other firms in the sector to surge today.

National Express was one of the largest gainers in the FTSE 250 index, surging almost 10% or 27p to 302.75p after it said it had rebuffed the approach from FirstGroup.

The interest boosted hopes of consolidation in the sector, with Arriva ahead 9.75p at 422p and Stagecoach up 2.25p at 127p.

Southern franchise owner Go-Ahead lost an earlier gain to fall 6p to 1231p, while FirstGroup retreated to 4.75p lower at 366p after its takeover target said it did not consider it appropriate to enter talks with its larger suitor 'at present'.

Another of the biggest gains in the FTSE 250 index came from Hargreaves Lansdown after the fund management firm said it expected full-year results to be above of market forecasts. Shares bounced 9p to 210p, a gain of 4%.

Moneysupermarket was 2.75p stronger at 51.25p amid hopes it has benefited from the signs of increased activity in the personal finance sector.

Retailer HMV joined the group on the risers board - up by 4p to 118.75p - ahead of its full-year results tomorrow.

Meanwhile, online fashion firm ASOS eased back by 19p to 361p after it reported a slowing in its rate of sales growth.