* FTSE 100 index gains 0.1 percent
* Rumours Verizon may buy out joint venture lift Vodafone
* Technical resistance seen around 6,100
* Banks and retailers among fallers
By Alistair Smout
LONDON, Jan 8 Britain's FTSE edged up in early
trade on Tuesday, consolidating a strong opening to the year
before the start of the corporate earnings season, with Vodafone
lifting the index into positive territory.
All eyes are on Alcoa, which reports the first major
fourth quarter results after European markets close today.
"After the run we've had, people will be looking to sit on
the sidelines, until we get a clearer picture and we see what
U.S. earnings look like," Mike McCudden, head of retail
derivatives at Interactive Investor, said. He expressed optimism
that the index would soon test the 6,100 level.
By 0911 GMT, the index was up 8.19 points, or 0.1 percent,
at 6,072.77, having posted its first loss of the year last
Hauling the index into positive territory was
heavily-weighted Vodafone, which gained 2.9 percent
after the Wall Street Journal reported that U.S. telecoms
company Verizon could buy out Vodafone's holding in their
Verizon's CEO said that a buy-out of Vodafone's 45 percent
of Verizon Wireless(VZW) is 'feasible', the Wall Street Journal
reported, with one trader saying that the only question is
whether Vodafone wants to sell.
NEW YEAR NEW FEAR
After a strong start to the year, the FTSE 100 has run up
against stiff technical resistance, which, despite Tuesday's
gains, was still left untested in early-session trade.
"The rally fell short of two previous tops from 2011 at
6103.00 to 6105.00. The inability to breakout over these two
tops is solid proof that investors consider the market
overbought and overpriced," James A. Hyerczyk, analyst at
Autochartist, said in a note.
"This is a strong sign that the index could be ripe for a
However, such a correction was seen as a healthy and
necessary step in a sustainable upwards move.
"This market move is purely a pull-back after a strong start
to the year. I have seen nothing in the economic numbers to
suggest this will be prolonged," David Battersby, investment
manager at Redmayne-Bentley, said.
"My mantra has always been whilst we are going to go higher
it will remain volatile,"
Such volatility was demonstrated in banks,
which lost 0.3 percent, having been the only major sector to
gain in last session's trading after a regulatory reprieve. HSBC
took the most points off the index after being cut to
"hold" from "buy" by Investec.
The bank was also hit by fears that Thailand's CP Group's
$9.4 billion bid to buy HSBC's stake in Ping An Insurance
could be jeopardised by the state-run
China Development Bank.
General retailers also lost 0.5 percent after
British retailers suffered from lacklustre sales last month, a
leading trade body said, with tough economic conditions limiting
consumer spending in the run-up to Christmas.
The sector was also weighed down by Debenhams, with
the FTSE 250 stock losing 4.8 percent after saying in a sales
update that it now expects gross margin for the 2012-13 year to
be 10 basis points higher than last year rather than 20 basis
points previously guided.
(Additional reporting by David Brett; editing by Stephen