* Fresh M&A speculation lifts Vodafone
* Technical indicators remain positive for FTSE 100
* Traders prefer buying on dips over selling on rallies
By Sudip Kar-Gupta
LONDON, April 2 Britain's benchmark share index
rose on Tuesday, with a surge in telecoms group Vodafone
pushing the index back towards 5-year highs reached at the start
of last month.
Traders added that technical indicators pointed towards the
likelihood of more near-term gains for the stock market, which
in March matched a record streak of 10 consecutive monthly
The blue-chip FTSE 100 index rose by 0.6 percent, or
36.35 points, to 6,448.09 points - moving back towards the
5-year peak of 6,533.99 points reached on March 12.
Vodafone topped the FTSE 100's leaderboard, rising 3.4
percent and adding the most points to the index after the
Financial Times Alphaville blog reported that U.S. peers Verizon
and AT&T had been working together on a breakup bid
for the British group.
Vodafone, the world's second-largest mobile operator, has
been at the centre of deal speculation in recent months, linked
to its ownership of a 45 percent stake in U.S. mobile operator
"The usual story with Vodafone is the Verizon saga. I just
think that this story has got legs to run on it," said Central
Markets chief strategist Richard Perry.
A renewal in merger and acquisition activity, coupled with
ongoing stimulus measures from world central banks, has enabled
equity markets to rise at the start of 2013, despite worries
over the euro zone's sovereign debt crisis which resulted in a
punitive bailout of Cyprus last month.
Perry said he would still look to buy the FTSE 100 on days
when the market fell, rather than sell it for a profit on days
when it rose.
"I'd still look to buy into any correction. Technically,
it's looking very sound," he said.
The FTSE 100 has traded above its 50-day and 200-day simple
moving average levels - a sign taken by some traders that it has
more room for near-term gains.
The index has risen nearly 10 percent since the start of
2013, having gained 8.7 percent in the first quarter. In March
alone, it rose 0.8 percent to achieve a 10th consecutive month
of gains for only the second time, the first having been in
A Reuters poll last month forecast that the FTSE 100 would
rise to reach 6,750 points by the end of 2013, and Hartmann
Capital trader Basil Petrides also said he would look to buy the
FTSE 100 on any dips, rather than sell into rallies.
"You've just got to be a buyer of the dips. The market's not
exhausted yet, and it's still got a long way to run," he said.
(Additional reporting by Kate Holton; editing by Stephen