* Vodafone falls after Verizon denies bid for it
* FTSE slips 0.4 pct, after solid gains in previous session
* Tendency remains to buy stocks on the dip
* Verizon Wireless deal still likely -analysts, traders
By Sudip Kar-Gupta
LONDON, April 3 Britain's benchmark share index
fell on Wednesday, retreating from gains in the previous session
as heavyweight telecoms group Vodafone weakened after
U.S. peer Verizon denied it was bidding for it.
The blue-chip FTSE 100, which rose 1.2 percent on
Tuesday to push the index back towards five-year highs reached
last month, was down by 0.4 percent, or 22.82 points, at
Verizon's denial sent Vodafone down by around 2.4 percent,
with Vodafone's fall taking the most points off the FTSE 100,
although Verizon added it would still be a willing buyer of
Vodafone's stake in their Verizon Wireless
Several analysts and traders expected a deal over Verizon
Wireless in the near future, which would prevent Vodafone shares
from losing too much ground.
"Credit markets are anticipating a change in the status quo
at Verizon Wireless and implied volatility analysis shows an
increased chance of a large move in Vodafone shares," Olivetree
Financial Group wrote in a note.
Securequity sales trader Jawaid Afsar also said he would
look to use Vodafone's fall to buy the stock on the cheap.
"I would be a buyer on the weakness. Some sort of action
will take place," he said.
BIAS TO BUY ON THE DIP
Expectations of a pick-up in merger activity, coupled with
injections of liquidity by world central banks into financial
markets, have enabled equity markets to continue a rally from
2012 into 2013 despite a weak economic outlook.
The FTSE 100 has risen nearly 10 percent since the start of
2013, and a Reuters poll last month showed that analysts and
fund managers expected it to reach 6,750 points by the end of
2013, and 6,582 by mid-2013.
Afsar said he would look to buy the FTSE 100 if it fell back
towards the 6,412 point level.
McLaren Securities Managing Director Terry Torrison also
said he would still look to buy shares on days when the market
fell rather than sell into rallies, on expectations that the
stock market would continue to rise gradually this year.
"I think we keep going onwards and upwards. There's no real
value anywhere else in comparison to the equity market, where
you've got both yield and upside," said Torrison.
(Editing by Stephen Nisbet)