A near 2% rise in Vodafone's shares is one of the factors driving the market higher.
The mobile phone group has added 2.85p to 166.3p ahead of its third quarter update on 7 February. Analysts at Espirito Santo said Vodafone had circulated consensus forecasts before the statement. They said:
We are in line with consensus for organic service revenue growth where we expect a decline of 2.4% year on year. A decline of this magnitude would represent a deterioration on the 1.4% decline last quarter. Southern Europe is expected to remain a drag with particular weakness in Spain and Italy
Our expectation of a slowdown in growth for the consolidated operations is in contrast to the acceleration in growth reported by [US joint venture] Verizon Wireless on Tuesday. Potential upgrades stemming from the better than expected growth at Verizon Wireless may well be tempered by the poor growth within the European operations.
At the same time, Goldman Sachs issued a buy note, saying there was potential for Vodafone to acquire cable company assets:
We lower our medium-term growth expectations for Vodafone given longlasting structural pressures in Europe. However, we retain our buy rating as we believe Vodafone has attractive potential to materially improve its structural position by acquiring cable assets, and realizing substantial potential synergies. We analyse this potential - our scenario analysis suggests that selling a portion of its stake in Verizon Wireless to fund cable acquisitions would be accretive to long-term value with cautious execution assumptions.
Positive noises on the company from hedge fund Greenlight is also helping to lift Vodafone.
Miners are also on the up, benefiting from encouraging factory figures from China, now one of the world's key commodity consumers.
Rio Tinto has risen 32.5p to 3533.5p while Anglo American has added 11p to £18.80.
