LONDON REPORT: FTSE:4,167.01 (+11.02) Mid-250:7,279.93 (–89.82) Small Cap:2,122.97 (–13.46)
TELECOMS STOCKS were among the best performers yesterday as risk aversion helped pull the FTSE 100 higher.
Vodafonerose 2.4 per cent to 125.45p after robust results from Verizon Wireless, its US joint venture.
Verizon’s first-quarter profit beat forecasts thanks to better mobile subscriber sign-ups than expected and a sector-leading profit margin.
JPMorgan said that, if the trends could be sustained, Verizon Wireless could start paying a dividend sooner than expected.
Verizon, which owns 55 per cent of the joint venture, uses the cash to pay debt and is not forecast to give Vodafone its share of a dividend before mid-2010.
BT Groupalso found support after Deutsche Bank added the stock to its "buy" list. BT rose 3.6 per cent to 91.3p.
Results next month will remove dividend and pension uncertainty as well as setting out a plan for BT’s underperfoming global services division, said Robert Grindle,Deutsche analyst.
“Whilst the economy remains a substantial headwind we feel that on balance, operational news should improve from here.”
The FTSE 100 rallied from an initial 1.6 per cent drop to close up 0.3 per cent, gaining 11.02 points to 4167.01.
Leisure stocks were the day’s main focus on concern the spread of swine flu would restrict travel.
British Airwaysslid 7.8 per cent to 151.2p, leading the blue-chip fallers, while Carnivalwas down 6.8 per cent to £18.07 and Thomas Cooklost 4.4 per cent to 270¼p.
Aero engine-maker Rolls-Roycelost 2.5 per cent.
Pharmaceuticals companies led the gainers in response to the fears of a pandemic and as investors favoured defensive sectors.
GlaxoSmithKline, maker of the Relenza flu treatment, climbed 5.7 per cent to £10.63. According to Goldman Sachs, every $500 million of additional Relenza sales would add 3 per cent to Glaxo's earnings.
AstraZenecagained 3.7 per cent to £24.83, also helped by a UBS upgrade to "buy" on valuation grounds.
Miners also recovered from early weakness, with BHP Billiton, Rio Tinto, Anglo American, Xstrata, Kazakhmys, Vedanta Resourcesand Antofagastadown 0.1 per cent to 3.1 per cent. – (Copyright The Financial TimesLtd 2009/Reuters)
