Britain's FTSE rangebound as Vodafone slides

Mon Apr 29, 2013 7:19am EDT

* FTSE 100 down 1.59 points

* Vodafone down as investors demand more for Verizon

* Aberdeen Asset Mgt rallies after revenues leap

By David Brett

LONDON, April 29 (Reuters) - Britain's top shares were rangebound by midday on Monday as investors sought out more reliable sectors, with Vodafone the biggest weight dragging on the index, while Aberdeen Asset Management rose after results.

By 1025 GMT, London's blue chip index was down 1.59 points at 6,424.83, just below levels around 6,500 from which the index has already sold off from twice in 2013.

"The FTSE 100 remains in a sideways range between 6,200 and 6,500: I would still regard this as healthy consolidation within the context of a longer term uptrend," Dominic Hawker, technical strategist at Messels, said.

Vodafone shaved 1.6 points off the FTSE 100 after six major Vodafone investors said $100 billion was not enough for the British company's stake in its U.S. joint venture with Verizon Communications VZ.N, and urged the latter to come up with an offer of at least $120 billion.

Vodafone's shares have rallied 28 percent so far in 2013, outperforming a near 9 percent rise on the FTSE 100, while investors remain hopeful of a full takeover from Verizon.

Elsewhere among the fallers the world's largest advertising group WPP shed 1.3 percent as HSBC cut its recommendation on the firm to "neutral" from "overweight", following results last week, Berenberg Bank kept its "sell" stance on WPP given limited visibility on earnings.

Earnings concerns remain a major stumbling block on indexes which are hovering around multi-year highs as weak sentiment surrounding the global economy, particularly in the euro zone, Britain's largest trading partner, remains.

DEFENSIVE GAINS

Defensive areas of the market such as utilities and consumer staples were the top risers on the FTSE 100 on Monday as investors remained cautious in their stock selection.

But with the index up around 9 percent this year despite anemic global growth, the increased activity is giving asset managers a boost.

Aberdeen Asset Management surged 8.9 percent after the fund firm reported first-half revenues leapt 25 percent.

"We expect Aberdeen to post (earnings per share)in the range of 29p/30p for FY13 (compared with consensus of 27.87, according to Starmine data) and we should see EPS upgrades if markets hold at current levels," Canaccord Genuity said in a note.

That lifted sentiment among peers with Schroders up 2.3 percent, which helped the broader financial sector, including banks, add 3 points to the broader FTSE 100.

Financials also received some support after Italy ended months of political deadlock by forming a government.

The deal brings an end to weeks of political uncertainty that had could have potentially further destabilised the euro zone economy, a region to which British financial institutions have great exposure. (Reporting by David Brett; Editing by Toby Chopra)