Friday, February 21 16:25:38
Britain's benchmark share index rose today and was set for its steepest weekly gain since December, as bid speculation around index heavyweight Vodafone led the market higher.
Mobile operator Vodafone rose 2.4 percent to 235.2 pence after both BofA Merrill Lynch and UBS called it a potential bid target once it sells its stake in U.S. mobile phone company Verizon Wireless.
Speculation about a takeover has been going on for several months, however, and some doubted one was likely, although they still thought Vodafone was a stock worth holding.
"We don't rate the bid prospects as high, but we still think there's value in Vodafone," said SVM Asset Management managing director Colin McLean.
Vodafone added the most points to the FTSE, and traders said the payout to shareholders from the Verizon deal should boost the broader UK stock market in the coming weeks.
"Obviously, the return of cash is going to provide some stimulus to the market," said Cavendish Asset Management fund manager Paul Mumford.
The FTSE was up by 22.47 points, or 0.3 percent, at 6,835.46 points in late trading, for a gain of almost 7 percent from an early February low. That put the blue-chip index on track for a weekly advance of around 2.5 percent, its steepest weekly rise since December.
"The market is reasserting its strength, and I am inclined to follow it," said Valerie Gastaldy, head of technical analysis firm Day-By-Day, adding that the FTSE should soon be heading to its all-time high of around 6,950 points.
State-owned lender Royal Bank of Scotland also rose as analysts welcomed reports that the bank will cut staff by up to a quarter, which could help lower its costs.
"The government sell-off of Royal Bank feels a little way off, but if this is as radical as we think it's going to be, then I think it'll help in that process," said Numis analyst Mike Trippitt.
Shares in housebuilder Persimmon gained 2 percent, as JP Morgan analysts tipped the sector to continue to benefit from a pick-up in the UK housebuilding industry.
Aerospace group BAE Systems also rose 3.1 percent, recovering slightly after an 8.3 percent loss in the previous session, when it warned of a drop in earnings this year.
The FTSE, which rose 14.4 percent in 2013 to post its best annual gain since 2009, is up 1.3 percent since the start of 2014.