* 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 (Reuters) - 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 gains.
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 Verizon Wireless.
“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 1996/97.
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 Nisbet)