Telecoms push up FTSE
Strong gains by Vodafone and BT pushed the FTSE 100 Index above 5900 for the first time in nearly five years.
The telecoms stocks led the way as Vodafone continued its recovery and BT jumped amid mounting speculation over a possible buyout.
And record profits from banking heavyweight HSBC added further momentum to send the Footsie up 52.8 points to 5911.5 by mid-morning.
Vodafone topped the blue-chip risers board with gains of more than 4% or 5p to 126.5p after chief executive Arun Sarin signalled the prospect of a potential £5b n (€7.3bn) pay-day for shareholders.
Mr Sarin indicated that the successful sale of the firm’s Japanese subsidiary would prompt directors to consider the best way of returning cash to shareholders.
Vodafone was followed north by BT – up 3% or 7p to 227.5p – as investors continued to be encouraged by reports last week that a number of global private equity firms were eyeing the company, although the group’s highly unionised staff and its £4.7bn (€6.9bn) pension fund deficit are thought to have deterred any bids so far.
The sector was also buoyed by news from the United States that telecoms were set for a major upheaval as AT&T announced plans to buy BellSouth for $67bn (€55.7bn).
Banking stocks added further momentum after HSBC unveiled annual profits of $20.97bn (€17.4bn) – the biggest figure recorded by a UK-based bank.
Shares in HSBC rose 13.5p to 988.5p, while HBOS gained 12p to 1001.5p and Royal Bank of Scotland cheered 20p to 1927p.
Outside the top flight, speculation that Matalan’s founder John Hargreaves is in talks with venture capitalists over a £900 million buyout meant shares in the discount clothing chain rose 4%, up 8.5p to 199.25p.
