* 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 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
The Bank of England, the European Central Bank and the Bank
of Japan are expected to remain ultra-accommodative at meetings
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
"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.)