FTSE gains 0.5% lifted by miners, Vodafone

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Britain's top share index gained 0.5 percent early on Monday as miners gained ground on firmer metal prices, and Vodafone bounced higher on renewed talk about the future of its U.S. tie-up.

By 0823 GMT, the FTSE 100 was up 25.59 points at 5,728.61, after it closed 0.4 percent lower on Friday.

Miners were the biggest support for the blue chip index, with Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and BHP Billiton ahead between 1.7 and 2.7 percent.

Mobile phone giant VodafoneL was the biggest single support for the index, adding 8.2 points to the FTSE 100 as it rose 2.7 percent.

The mobile telecoms giant was supported by a report in the Sunday Telegraph that it is discussions with U.S. counterpart Verizon Communications over the future of Verizon Wireless, a US mobile phone joint venture between the two companies.

A spokesman for Vodafone declined to comment on any recent talks between the two firms.

"Miners look better as commodity prices are up and Vodafone is up as that deal looks to be tidied up," said David Buik, senior partner at BGC Partners.

"We're heading towards the end of the (financial) year and unless there is some disastrous news it (the FTSE 100 index) looks set to sail into next month around current levels."

Cable & Wireless Worldwide was the top large-cap gainer, up 2.9 percent after Nomura started coverage of the newly de-merged entity with a "buy" rating.

But its former parent Cable & Wireless Communications fell 1.1 percent after the company was cut to "reduce" from "buy" by Nomura, and with the stock to be demoted to the FTSE 250 index from April 30.

Among mid-caps, Carphone Warehouse added 13.5 percent after it demerged its TalkTalk unit. TalkTalk was down 1.2 percent.

Back with thE blue chips, satellite broadcaster BSkyB fell 1.5 percent as UBS cut its rating on the stock to "neutral" from "buy" citing valuation grounds, and ahead of regulator Ofcom's pay TV review, expected on Tuesday.

Selected defensive stocks like tobacco companies, supermarkets and beverage producers were on the front foot, helped by investor uncertainty about whether the rally in the market can be sustained.

Imperial Tobacco, SABMiller, and Tesco added 0.4 to 0.9 percent.

Pharmaceuticals stocks were weaker, however, with GlaxoSmithKline and AstraZeneca down 0.7 and 0.5 percent respectively, giving back some recent gains.

Shares in small cap Antisoma fell as much as 72 percent to an all-time low of 9 pence after the drugs company halted a late-stage trial of its lead prospect lung cancer drug ASA404 due to a lack of efficacy.

With the end of the first-quarter approaching, the blue-chip index is up 5.9 percent this year after it gained 22 percent in 2009, and is just below a 21-month high set last week.

"Equities are looking relatively attractive with governments around the world being so inept in reining in their debt and bond yields rising," David Buik said.