Reuters: Hot Stocks: Vodafone, Syria threat weigh on Britain's FTSE

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Vodafone, Syria threat weigh on Britain's FTSE Sep 3rd 2013, 16:22 Tue Sep 3, 2013 12:22pm EDT * FTSE 100 down 0.6 pct to 6,468.41 pts * Extends losses into close as U.S. Republican speaker backs Syria action * Vodafone weighs as terms of joint venture disappoint * Miners and HSBC higher on Chinese data boost By Francesco Canepa LONDON, Sept 3 (Reuters) - Britain's top share index fell on Tuesday, weighed down telecoms giant Vodafone disappointing with the terms of a sale deal with partner Verizon and by fresh speculation about a U.S.-led attack on Syria. Vodafone was among the most heavily traded stocks at three times its daily average. It fell 5 percent, knocking 20 points off the FTSE 100. In all, the FTSE 100 fell 37.8 points, 0.6 percent, having extended losses in late trade after John Boehner, the Republican speaker of the U.S. House of Representatives, said he would support President Barack Obama's call for military action in Syria and urged his colleagues in Congress to do the same. Global stock markets have been jittery in the past week as the prospect of an international conflict in the oil-rich Middle East unnerved investors, although traders cautioned any action was unlikely before a U.S. Congress vote later this month. "Boehner ... has been at loggerheads with Obama on everything - so this is significant," a senior trader in London said. "The next thing to watch for is Congress being recalled early. If Obama is sure they have the numbers then Congress will be recalled." Reports of missiles heading towards the Eastern Mediterranean - which later turned out to be part of a U.S.-Israeli test - had briefly sent the FTSE to an intra-day low of 6,456.95 points. Volume on the FTSE, which had been low for most of the day, surged in late trade to close at 3 percent above the index's average for the last three months. VODAFONE While the deal with Verizon would allow Vodafone to return $84 billion of the net proceeds of the deal to shareholders, the division of that payout between shares and cash is capped. "The cash element of the payout is probably less than expected," Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said. "For shareholders there is also the strange situation that, while Vodafone has cut ties with Verizon, they (the investors) haven't, so some of the institutional shareholders could be taking this early opportunity (to cash in), especially if they can't hold U.S. stocks in their portfolio." Simon Maughan, strategist at Olivetree calculates the payout structure means Vodafone shareholders will not benefit from any strength in Verizon's shares until the stock has rallied 7.6 percent, while they wear most of the potential downside. Beyond this, stocks exposed to China such as miners gained after China's services sector grew steadily in August as domestic demand picked up, official data showed on Tuesday. "With Chinese data encouraging, we remain optimistic for the market in terms of absolute growth," said Atif Latif, director at Guardian stockbrokers, who expected the FTSE to push to 6,875 points, a high tested in May and previously seen in 1999. (Reporting By Francesco Canepa Editing by Jeremy Gaunt) Link this Share this Digg this Email Reprints

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