Vodafone Rumours Support FTSE

WEDNESDAY MARKET UPDATE: Shares in Vodafone rallied by nearly 7% on rumours Verizon might buy out Vodafone's stake in Verizon Wireless or possibly buy all of Vodafone

Alanna Petroff 6 March, 2013 | 6:21PM
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Despite a rally earlier in the day, the benchmark FTSE 100 index sank back in the afternoon and ended the trading day relatively unchanged. The index edged down by 4 points, or 0.1%, to close near a 5-year high at 6,428.

"Gains were pared going into the close as some investors chose to lock in profits ahead of a busy schedule of economic data and central bank decisions for the last two trading sessions of the week," said Fiona Cincotta, a market analyst at City Index.

Meanwhile, the mid-cap FTSE 250 index held on to some of its morning gains and closed the day at 13,923, which is 62 points, or 0.5% higher, compared to yesterday's close.

Rumours Driving Share Price Swings

Shares in Vodafone (VOD) supported the FTSE 100 rally earlier in the day and ensured the index didn't slip too far into the red at the close.

"Vodafone's stock has increased on rumours Verizon Communications (VZ) might buy out Vodafone's stake in Verizon Wireless or possibly buy all of Vodafone. [But] we don't think the rumours are very likely to pan out in the short-term," said Morningstar analyst Allan Nichols.

Meanwhile, Imperial Tobacco (IMT) shares were down by nearly 2.5% following a story in the Guardian suggesting that the Queen will announce in May an initiative to curb tobacco use.

"Any sudden decrease in cigarette use in the UK will disproportionately impact Imperial Tobacco, which holds 45% market share of the country's cigarette market, and 47% share in the fine cut market, and derives roughly 21% of its operating profit from the country," explained Morningstar analyst Thomas Mullarkey.

To see the top winners and losers on the FTSE 100 each day, check out Morningstar's Heat Map.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Imperial Brands PLC1,774.00 GBX1.46Rating
Verizon Communications Inc40.49 USD0.90Rating
Vodafone Group PLC67.00 GBX0.93Rating

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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