FTSE in positive ground on miners, Vodafone

Mon Mar 29, 2010 7:27am EDT

* FTSE 100 up 0.2 percent

* Vodafone higher on Verizon talk

* Miners strong on firmer metal prices

By Simon Falush

LONDON, March 29 (Reuters) - Strength in miners and from mobile phone giant Vodafone (VOD.L) nudged Britain's top share index into positive ground in thin trade by midday on Monday, but weaker energy stocks and pharmaceuticals capped gains.

By 1103 GMT, the FTSE 100 .FTSE was up 9.39 points or 0.2 percent at 5,712.31, after it closed 0.4 percent lower on Friday.

Miners were the biggest support for the blue chip index, buoyed by firmer metal prices, with Rio Tinto (RIO.L), Xstrata XTA.L, Lonmin (LMI.L), Anglo American (AAL.L), Kazakhmys (KAZ.L) and BHP Billiton (BLT.L) ahead between 1.2 and 2.9 percent.

Mobile phone giant Vodafone (VOD.L) was the leading single support for the index, adding 6.9 points to the FTSE 100 as it rose 2.3 percent.

The mobile telecoms giant was supported by a report in the Sunday Telegraph that it is in discussions with U.S. counterpart Verizon Communications over a possible dividend payment from Verizon Wireless, a US mobile phone joint venture between the two companies.

A spokesman for Vodafone declined to comment on any recent talks between the two firms. [ID:nLDE62S0FX]

But volumes were thin with just 31 percent of the last 90 trading days traded by midsession, with investors awaiting further direction from closely watched non-farm payrolls data due out on Friday.

"We're in wait-and-see mode ahead of non-farm payrolls," said Henk Potts, strategist at Barclays Wealth. "People are looking to see where to use excess cash and with low interest rates and relatively undemanding valuations, there's scope for further gains."

DUO DEMERGE

Cable & Wireless Communications (CWC.L) fell 1.3 percent after the company was cut to "reduce" from "buy" by Nomura, following Friday's demerger of Cable & Wireless Worldwide CWP.L. C&W Communications will be demoted to the FTSE 250 .FTMC index from April 30.

Also on the demerger front, mid-cap Carphone Warehouse CPW.L added 0.1 percent after it spun off its TalkTalk (TALK.L) unit. TalkTalk added 1.2 percent.

Back among large caps, satellite broadcaster BSkyB (BSY.L) fell 1.3 percent as UBS cut its rating on the stock to "neutral" from "buy" citing valuation grounds, and ahead of regulator Ofcom's pay-TV review, expected on Tuesday.

Selected defensive stocks like tobacco companies, supermarkets and beverage producers were on the front foot, helped by investor uncertainty about whether the rally in the market can be sustained.

British American Tobacco (BATS.L), SABMiller (SAB.L), and Tesco (TSCO.L) added 0.2 to 0.4 percent.

Pharmaceuticals stocks were weaker, however, with GlaxoSmithKline and AstraZeneca (AZN.L) down 0.1 and 0.2 percent respectively, giving back some recent gains.

Shares in small-cap Antisoma ASM.L fell as much as 72 percent to an all-time low of 9 pence after the drugs company halted a late-stage trial of its lead prospect lung cancer drug ASA404 due to a lack of efficacy.

With the end of the first quarter approaching, the blue-chip index is up 5.6 percent this year after it gained 22 percent in 2009, and is just below a 21-month high set last week.

"Equities are looking relatively attractive with governments around the world being so inept in reining in their debt and bond yields rising," David Buik, senior partner at BGC Partners said. (Editing by Jon Loades-Carter)

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