London Report: Vodafone lifts FTSE as mining shares weaken

FTSE 100 heavyweight Vodafone helped lift Britain’s benchmark equity index yesterday, as gains in the telecoms group offset weaker mining stocks that had earlier pegged back the market.

Yet despite the late rally, some traders expressed doubts over whether the FTSE 100 would end 2013 at a record 7,000 points as some investors have previously forecast.

The FTSE 100 erased losses from earlier in the session to close up by 0.1 percent, or 7.49 points, at 6,559.48 points.

Vodafone rose 1.1 per cent to 233.45 pence, to add the most points to the index.

Traders cited ongoing bid rumours concerning Vodafone along with the company’s relatively attractive dividend yield as reasons behind the stock’s rise on Monday.

JNF Capital trader Rick Jones added that Vodafone’s shares had been further buoyed by breaking above the 230 pence level.

“I wouldn’t expect to see much resistance to this stock until we get to the 250 pence level,” he said.

The rise in Vodafone offset falls at major mining stocks, as the FTSE 250 Mining Index finished 0.2 per cent lower after import data from China – the world’s biggest metals consumer – came in below forecasts.

Jones felt the FTSE 100 would end 2013 in the 6,800-7,000 point level.

Others, however, were more sceptical and pointed to how the market was being held back by the mining sector, which has been dogged by concerns over a possible economic slowdown in China.

McLaren Securities managing director Terry Torrison felt weakness in the mining sector would prevent the FTSE from ending 2013 at 7,000 points, as many traders have previously forecast.

“I don’t think it will make 7,000 points. I think we’ve had our rally for the year,” said Torrison.

The FTSE 100 remains up by around 11 per cent since the start of 2013. However, in spite of its broad upwards trajectory, the index has failed to rise back to a 13-year peak of 6,875.62 points reached in late May.

Securequity sales trader Jawaid Afsar said that although he felt the FTSE would hit the 7,000 point level next year, buoyed by signs of an economic recovery in Britain, he expected the index was more likely to end 2013 around the 6,800 level.

“We will get to 7,000 points eventually because the fundamentals are in place, but it won’t be this year,” he said.