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.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.