* FTSE 100 up 0.4 percent
* Vodafone leads gainers on Verizon talk
* Melrose, Admiral, L&G rise post results
* Ex-divs knock 7.6 points off index
By Tricia Wright
LONDON, March 6 (Reuters) - Britain’s top share index hit fresh five-year highs on Wednesday, helped by renewed reports of a potential merger between Vodafone and its U.S. joint venture partner Verizon.
Bloomberg reported on Tuesday that the two sides had discussed options including ending the Verizon Wireless joint venture, a partial sale of Vodafone’s stake or a full merger of the two firms.
Vodafone advanced 6.8 percent in brisk volume, alone adding 22.4 points to the FTSE 100, moving through its 200-day moving average, currently at 172.4 pence.
If it closes the day above this level, Richard Curr, head of dealing at Prime Markets, expected a retest of the early September high - at around 183 pence - in the next 7-10 days.
The FTSE 100 was up 26.03 points, or 0.4 percent, at 6,457.98 by 1157 GMT, having closed above 6,400 points on Tuesday for the first time in over five years, helped by support from central banks.
Investors were eyeing meetings from major central banks this week, with sentiment having been buoyed by assurances from U.S. Federal Reserve officials that their stimulus programme remains in place.
The Bank of England, the European Central Bank and the Bank of Japan are expected to remain ultra-accommodative at meetings this week.
The mood was darkened by data - albeit confirming an earlier reading - which showed economic output from the 17 nations sharing the euro fell 0.6 percent in the fourth quarter of 2012, the biggest quarter-on-quarter fall in a year of contraction.
“You’ve got this complete disconnect between what equity markets are doing and what the broader economy is doing,” Michael Hewson, analyst at CMC Markets, said.
“While in the short term (central banks sticking with easing measures) will certainly drive asset values higher, at some point those values have to reflect the economic fundamentals that are at play.”
Engineering turnaround specialist Melrose rose strongly, up 5.5 percent after it reported a 38 percent increase in full-year profit.
Admiral climbed 3.8 percent after the car insurer posted a 15 percent rise in annual profit and raising its total dividend by 20 percent.
And results from insurer Legal & General (L&G) saw its shares advance 4.2 percent. It posted operating profit marginally above consensus and announced a bigger-than-expected dividend.
“Legal and General has delivered exactly what traders wanted ... an increase in full-year profits and more importantly in their full year dividend, which is up 20 percent from last year,” John Truong, senior trader at Accendo Markets, said.
Companies trading without their entitlement to the current dividend, namely BHP Billiton, CRH, Rio Tinto , Shire and TUI Travel - took 7.6 points off the index on Wednesday, according to Reuters calculations at current market prices.
Reporting by Tricia Wright, additional reporting by David Brett. Editing by Jeremy Gaunt.