Vodafone steadies FTSE

Vodafone steadied the FTSE 100 Index after investors gave the thumbs-up to the mobile phone group’s deal to bolster its presence in India.

With one of the market’s most influential stocks ahead almost 3%, the Footsie limited losses to stand 17 points lower at 6365.8 by mid-morning.

Attention was also focused on the FTSE 250 Index after tour operator MyTravel agreed a merger with Thomas Cook and the London Stock Exchange fought off a long-running takeover attempt from New York’s Nasdaq.

The proposed MyTravel deal hit investors in rival First Choice as the firm had been hoping that either Thomas Cook or MyTravel would buy its mainstream holidays business. With First Choice appearing to be jilted and faced with increased competition, shares dived 14%, or 43.25p, to 262p.

MyTravel surged 31%, or 74.25p, to 312.25p, after the company’s board agreed to give German-owned Thomas Cook a 52% stake in the enlarged group.

Back in the top flight, the consolidation was seen as bad news for cruise ship firm Carnival, which eased 37p to 2627p.

Investment firms led the sell off in the FTSE 100 Index, as Man Group dipped 13.25p to 578.25p and Amvescap dipped 13p to 622.5p. Icap was also down 7p to 492p, while Old Mutual eased 2.25p to 178.25p.

Vodafone – up 4.25p to 153.5p – offset some of the weakness in the wake of its £5.7 billion acquisition of a controlling stake in India’s Hutchison Essar. Analysts said Vodafone paid a high price, but pointed out the significance of the acquisition for boosting the company’s exposure to emerging markets.

Rolls-Royce topped the risers board, ahead 14.75p to 517p as investors eyed the possibility of a share buy-back from the aero-engine giant.

Pharmaceuticals company GlaxoSmithKline followed with a gain of 13p to 1463p, helped by a slight earnings forecast upgrade from Merrill Lynch.

Meanwhile, London Stock Exchange shares held firm despite the company being out of an offer period for one of the few occasions since December 2004. That was after Nasdaq’s offer lapsed, but shares were still above the offer price – down 11p at 1271p.