Vodafone bid talk quashed as FTSE falls 18pts
City Index April 3, 2013 2:31 PM
<p>Bid talk surrounding communications giant Vodafone was quashed last night by Verizon, sending the firm’s shares lower by 2.57% in early trading and providing a […]</p>
Bid talk surrounding communications giant Vodafone was quashed last night by Verizon, sending the firm’s shares lower by 2.57% in early trading and providing a drag on the FTSE 100 index.
Verizon quashes bid talk for Vodafone
Vodafone’s shares had hit a new 10 year high only yesterday on the back of speculation that the firm is now a bid target for its US partner Verizon in an effort to overcome potential tax issues over the sale of its stake in Verizon Wireless. Indeed, the speculation that Vodafone could in fact be acquired was surprising given its size and power – Vodafone is the second largest company on the FTSE 100 according to Reuters, with a 5.75% weighting on the FTSE 100. Yet there has been a ramping up of speculation that Verizon could look to acquire Vodafone over the past few weeks as Vodafone’e CEO Vittoria Colao oversees options for selling its stake its US partnership Verizon Wireless.
However, Verizon announced last night that it does not ‘currently have any intention’ to merge with or buy Vodafone Group either alone or in a joint buyout with other firms. The firm maintained that it does remain interested in acquiring Vodafone’s 45% stake in Verizon Wireless. This news sent traders in profit taking mode, sending Vodafone’s shares lower by 2.5% in morning trade.
ENRC shares slump 11%
Miner ENRC shares slumped a whopping 11% in early trade, providing a drag on the mining sector and the FTSE. Shares have been in a downward spiral since the second quarter of 2010 and have fallen to reach a new four and half year low this morning of 201p, where support lies. The selling in the firms shares today was backed up by some significant volumes, which is concerning despite how far the company’s shares prices have fallen in the last few years.
FTSE 100 still in upward channel
In broader trade, the FTSE 100 fell 18pts to trade at 6459. There is nothing significant to read into today’s falls, particularly when taken into the broader content of yesterdays string rally that saw the FTSE gain 1.2%. The UK Index remains in an bullish channel and support lies at the 6360 level in the near term.
There is a significant amount of economic data out for the remainder of this week which is likely to keep a volatile edge to trading as investors react to data and their likely impacts on monetary stimulus.
Chinese PMI data rose month on month with the services side of the data rising to 54.3 from 52.1. The afternoon brings an opportunity to look at the US private jobs sector ahead of Friday’s payrolls with ADP employment report alongside US ISM non manufacturing data.
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