Market Report: Dixons Carphone soars as Vodafone hangs up on Phones 4U

With markets in the US closed for Labor Day, the FTSE 100 was quiet

One man’s loss is another’s gain – a hammer blow to Phones 4U sent rival  Dixons Carphone soaring on the mid-cap index.

Vodafone has decided to it will no longer offer its contract deals through Phones 4U stores, a decision which “surprised and disappointed” the retailer.

It leaves Phones 4U in a tough spot – Vodafone contracts account for a big chunk of revenues and in January O2 pulled out of its stores. EE has also threatened to pull the plug on its relationship.

Not only does Vodafone’s decision potentially scupper reported plans for a float of private equity-backed Phones 4U later this year, the move provides a significant boost to recently merged electronics retailer Dixons Carphone, which shot up 23.8p to 368.4p.

With markets in the US closed for Labor Day, the FTSE 100 was quiet, closing just 5.56 points higher at 6,825.31.

ITV was the best performer, buoyed 7.5p to 218.7p by reports over the weekend that the US giant and its minority shareholder Liberty Global is considering a takeover bid. Liberum reckon the broadcaster could be valued at up to £11.6bn.

BAE Systems scored a double boost as star fund manager Neil Woodford name-checked the defence giant as an undervalued stock and Bank of America Merrill Lynch upgraded the company to a buy. BAE added 10.9p to 456p.

Supermarkets continued to drag, with the arrival of Mr Fix-It Dave Lewis at Tesco not enough to assuage fears.

Wm Morrison slumped 4p to 173.5p, while Tesco shed 4.4p to 225.55p and J Sainsbury lost 0.8p to 289.5p. But Marks & Spencer bucked the slump, climbing 11.1p to 441p.

Troubled oil and gas explorer Afren continued to fall after speculation over the weekend that the current investigation into unauthorised payments to executives could explore as much as $200m (£120m) in transfers. Afren slumped 2.9p to 94.6p.

Microchip maker CSR added 9p to 795p after US suitor Microchip Technology indicated any fresh offer for the company would likely be an all-cash affair. CSR last week revealed it had rebuffed an initial approach.