By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE 100 index rallied on Monday,
with shares of Vodafone Group PLC among best performers on reports
it has reached a tentative deal to sell off its stake in Verizon
Wireless.
The benchmark index climbed 1.5% to close at 6,506.19, marking
the best trading day since early July.
The index was buoyed by PMI data for the U.K. showing the
reading for the manufacturing sector hit a two-and-a-half-year high
in August of 57.2, up from a revised reading of 54.8 in July.
Analysts expected a reading of 55, according to FactSet.
Among notable movers in London, Vodafone (VOD) picked up 3.4%
after sources said the telecom firm had reached a tentative deal to
sell Verizon Communications Inc. (VZ) its 45% stake in their joint
venture Verizon Wireless for $130 billion. Vodafone confirmed the
deal after the market closed.
The broader European telecom market was also buoyed by an
upgrade from Goldman Sachs, who lifted the sector to neutral from
cautious based on recent consolidation activities.
BT Group PLC added 4%.
Mining firms were also on the rise, tracking most metals prices
higher after upbeat data from China. The official Chinese
manufacturing Purchasing Managers' Index rose to 51.0 in August
compared with 50.3 in July, while the HSBC PMI climbed to a final
reading of 50.1 in August from 47.7 in July. A reading above 50
indicates expansion in manufacturing activity from the previous
month.
Anglo American PLC picked up 3.9%, Glencore Xstrata PLC (GLCNF)
gained 2.2% and BHP Billiton PLC (BHP) added 2.3%. Shares of Rio
Tinto PLC (RIO) climbed 4.2% after the heavyweight miner said it
had begun shipping iron ore from its newly expanded port, rail and
mine facilities in Western Australia.
Bucking the positive trend among miners, shares of Fresnillo PLC
lost 2.2% after UBS cut the firm to neutral from buy.
Among other notable movers, shares of advertising giant WPP PLC
put on 3.5% after Deutsche Bank lifted the firm to buy from
hold.
"The strategic challenge of adapting to digital is massive, but
there is a major growth opportunity in prospect for groups that can
successfully make the transition. We see WPP as the best-placed
agency group to capitalize on changing circumstances in the ad
market," the analysts said.
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