By Aude Lagorce, MarketWatch
LONDON (MarketWatch) -- Vodafone Group rose on Monday, helped by
a report it's about to sell its stake in SFR, but U.K. markets
generally lacked inspiration after last week's excitement.
The FTSE 100 fluctuated between small gains and losses all
morning. It was recently flat at 5,744.22.
The benchmark closed down 0.4% on Friday but managed to snap a
three-week losing streak, clocking weekly gains of 1.4%.
A lack of direction was obvious as Monday rolled in.
"We're stuck in a bit of a limbo. There was a lot of excitement
last week with some big U.S. data and the potential for more action
from the European Central Bank. We're not living in quite as
exciting times this week," said Philip Isherwood, strategist at
Evolution Securities.
He stressed, however, that he is optimistic about U.K. equities
in 2011.
"A lot of people have had a lot of reasons to allocate towards
bonds and ignore the incredibly positive message from U.K.
companies recently. But they are growing, hiring, doing deals.
Equities are still the best way to play the economic cycle and the
double-dip scenario has been increasingly discredited by the recent
data," he added.
Vodafone in the limelight
One stock that shone Monday was Vodafone (VOD). Shares of the
world's largest mobile operator by revenue gained 1.2%. The
Observer reported that Vodafone is finalizing a deal to sell its
44% stake in French mobile operator SFR to co-owner Vivendi SA
.
Retailers declined, led by supermarket giant Tesco , down 1.6%
after it was downgraded to neutral from buy at UBS.
The broker said U.K. growth is likely to be slower over the next
decade and warned that international opportunities, including in
China, wouldn't be enough to maintain the pace of expansion. Tesco
reports third-quarter sales Tuesday.
The gloomy forecast weighed on other retailers. Shares of rival
J. Sainsbury PLC fell 0.6% and WM Morrison Supermarkets declined
0.3%.
In the banking sector, HSBC Holdings PLC (HBC) slipped 0.2%. The
trustee seeking money for victims of Bernard Madoff's fraud is
suing the U.K. bank and a group of feeder funds for at least $9
billion.
A few outperformers were to be found in the mining sector, as
shares of Xstrata PLC added 2.9%. But Rio Tinto PLC (RIO) declined
0.2% after Australia's Riversdale Mining said it held talks with
Rio on a potential A$3.5 billion ($3.45 billion) takeover
Oil-related companies got a boost as oil traded near $90 a
barrel.
Shares of BP PLC (BP) gained 0.8% and BG Group PLC climbed
0.7%.
Outside the top index, shares of De La Rue PLC surged 22% after
the banknote printer said it has received a "highly preliminary and
opportunistic" approach.
The statement came after Sky News reported that the company had
rejected a 750 million euro ($997 million) bid from French
smartcard specialist Oberthur Technologies.