Market Report: City attempts to play match maker for Vodafone

The City continues to play match maker for a reluctant Vodafone, wondering out loud about potential deals that the telecoms giant could do.

It insists it is just fine as it is but looks increasingly isolated as BT, up 8.5p at 420p, eyes a deal with either EE or O2.

Both Goldman Sachs and Jefferies see the Virgin Media owner Liberty Global as the most likely target for Vodafone. Goldman takes a largely positive view of any potential deal but Jefferies is more wary, warning that it would stretch the balance sheet and threaten the sustainability of the dividend.

But the broker also says that “transformational” M&A is needed in the long term and it’s better to bite the bullet now. Vodafone improved 6.95p to 230.60p.

The FTSE 100 rose 63.47 points to 6,742.84, buoyed by better than expected US jobs figures. The British Airways owner IAG was the biggest beneficiary of the data, rising 20.2p to 486.7p on hopes of increased business travel. The continued slump in oil prices also helped, although for others it meant pain. Tullow Oil declined 12.9p to 396p, while the oil services specialist Petrofac gave up 13.5p to 778p.

Investec examined the oil-airline relationship, arguing that cheaper fuel will lead to cheaper air tickets, which in turn will boost passenger numbers. That will increase demand for parts as planes fly more frequently and older models are revived to meet demand – all good news for the engineer Meggitt, up 16.5p at 518p.

Investors are expecting good things at SuperGroup’s interim results on Thursday; the fashion brand rose 53.5p to 922p.

Outsourcery, the cloud computing specialist run by the Dragons’ Den star Piers Linney, rose 6p to 27p on AIM after announcing a contract with an unnamed FTSE 100 company worth £1.1m over the next three years.

The mobile payments specialist Monitise climbed 1.75p to 31.5p thanks to a seven-year “strategic partnership” with Virgin Money. Monitise will help to develop the bank’s digital banking services.

The revival of companies such as LinkedIn helped Polar Capital Technology Trust up 2.5p to 567.5p.