VODAFONE shares rose three per cent yesterday as investors cheered the completion of a long-awaited deal to sell its stake in US operator VerizonWireless.
As well as realising [pounds]50bn for investors in the shape of cash and shares, the City was also excited by the mobile firm's prospects going forward.
Vodafone and a strong session for banking stocks ensured the FTSE 100 Index took another step towards a record high, rising 25.1 points to 6838.1.
The top flight closed higher for a third week in a row, having risen by more than 150 points since last weekend and bringing the December 1999 intraday high of 6950.6 firmly into view.
The return of the Verizon proceeds to Vodafone shareholders is expected to give amajor lift to the London market in the coming weeks as much of the money will be re-invested.
And Vodafone shares are benefiting from speculation that it may now become a bid target, while Citigroup reiterated its buy rating on the slimmed down company as a result of its strong record. Vodafone climbed 6.9p to 236.5p.
Royal Bank of Scotland was higher on expectations that the state- owned bank will unveil a radical restructuring alongside full-year results on Thursday. It was 4.4p higher, at 360.1p. HSBC was 2.1p stronger at 654.2p and Barclays 2.75p higher at 258p.
Investors also returned to BAE Systems after a pounding for the defence and security products business in the wake of full-year results on Thursday. Shares slumped eight per cent in the previous session, wiping around [pounds]1bn from its market value, although the stock recovered 10.9p to 411.3p.
Royal Mail fell 1.5 per cent after Ofcom opened an investigation into a complaint by TNT Post UK about changes to access contracts.
Royal Mail believes the complaint is unfounded, but shares dropped 9p to 600p.