* FTSE 100 up 0.6 pct after falling for 2 days
* Vodafone surges on M&A news, telecom sector up
* WPP up on strong numbers, second-biggest gainer
By Atul Prakash
LONDON, Aug 29 Vodafone shares lifted
Britain's top stock index on Thursday after the company
confirmed it was in talks with Verizon Communications for
possible disposal of its 45 percent stake in a joint venture.
Vodafone was 8.9 percent higher after hitting a 12-year high
on the news.
A surge in Vodafone, which added most points to the FTSE 100
index, helped telecoms shares top the sectoral gainers'
list. Analysts said the sector's outlook remained positive and
there could be more M&A activities, albeit at a smaller scale.
"The sector looks good because going into 2014 revenues
could start to pick up, capacity could tighten and demand could
be quite good if consumer spending comes back, which looks like
it is," Daniel McCormack, strategist at Macquarie, said.
"The near-, medium- and long-term outlook for equities is
excellent. In the near-term you are going to see earnings
downgrade fade in intensity and the macro numbers keep
improving. Valuations are still good."
At 0744 GMT, the blue-chip FTSE 100 index was 37.69 points,
or 0.6 percent, higher at 6,467.75 points after falling 0.2
percent in the previous session and 0.8 percent on Tuesday.
The market was also supported by indications that a military
strike against Syria in response to recent chemical weapons
attack could be delayed after U.S. President Barack Obama faced
new obstacles with British allies and U.S.
Among other sharp movers, WPP rose 3.5 percent, the
second-biggest gainer on the FTSE 100, after the world's biggest
advertising agency improved its outlook for the full-year and
reported a 5 percent rise in like-for-like revenues in July, its
strongest monthly rate this year.
"The benefits of diversification are exemplified by today's
numbers," Richard Hunter, head of equities at Hargreaves
Lansdown Stockbrokers, said.
"Overall key metrics remain strong, the dividend policy
progressive and the full year outlook sales numbers have been
increased. The market view of WPP as a strong buy is likely to
(Editing by Jeremy Gaunt.)