Market Report: Vodafone buoyed by hopes of Japan turnaround

Vodafone received a welcome boost yesterday from better-than-expected subscriber numbers at its struggling Japan unit, sending shares in the mobile phone giant, up 3p to 128.75p, to the top of the FTSE-100 leader board.

Vodafone boasted that its mobile phone subscriber base in Japan had grown by 57,000 in November to 15.05 million. In the previous three months it had registered just 4,000 additions, and the latest data led to hopes that a turnaround is imminent at the business.

The group certainly outperformed its rivals in that part of the world, and led to applause from Dresdner Kleinwort Wasserstein. The broker said: "November net gains suggest that the company is making progress." It believes that Vodafone's new tariffs, which offer flat-rate calling between users who talk the most often, are generating strong interest from customers.

Nevertheless, there have been some suggestions that Vodafone might be tempted to sell its Japan business. Credit Suisse First Boston argued this week that the sale of the division is looking increasingly likely on a one-to two-year view. It calculated that this would boost the group's shares by between 10 and 15p.

Elsewhere in the blue-chip index, Man Group rose 15p to 1,920p after announcing a strong performance from its AHL Fund. Bradford & Bingley added 6.5p to 386p on hopes that the mortgage bank will soon be bought. Many talked of the Spanish bank Santander Hispano Central as the possible buyer. It owns Abbey which, according to market professionals, would make a good fit with B&B. Merrill Lynch become the latest broker to turn more positive on Next, off 9p to 1,484p. The US broker raised its stance on the retailer to "buy" from "neutral" and told its clients that fears about the competitive threat posed by the recovery at Marks & Spencer have been overblown. In addition, Next continues to aggressively add space, which should translate into market-share gains, according to Merrill Lynch.

Meanwhile, the FTSE 100 rose to its highest level since August 2001 in early trading. But the party was spoiled by a weak start to trading on Wall Street that left London's blue-chip index down 10 points at 5,528.8 by the close.

The housebuilder Persimmon, 1p better at 1,139.5p, and the Kazakhstan miner Kazakhmys, 7.5p better at 691p, were confirmed as having won promotion to the FTSE 100 in the latest quarterly review of the index. They will replace the bookmaker William Hill, 3p higher at 526p, and Whitbread, 1p higher at 951p, with the changes expected to take effect on 16 December.

Mowlem closed flat at 208p, but importantly above Carillion's 205p-a-share bid price amid hopes of a counter-offer for the construction group. Some talked of Balfour Beatty, up 1.75p at 347.25p, as possibly interested in Mowlem, while others suggested that a Spanish group might be tempted to throw its hat into the ring.

Cookson gained 2p to 390p despite rumours that Merrill Lynch was trying to find a home for a line of 3.8 million shares as one of its clients looked to exit the engineer. Supporting the stock was a "buy" note from Panmure Gordon. It drew attention to the £641m of tax losses on the group's balance sheet which it believes are a significant asset for the company.

Cookson shares have appreciated by 26 per cent over the past month amid speculation of a bid for the engineer. Panmure views Cookson as an unlikely takeover candidate given the diverse nature of its business, combined with a pension deficit of £214m, but did admit that its tax losses might enhance its allure to predators. According to the broker, a buyer of the company can take advantage of these losses as long as it operates in the same sector as Cookson.

JD Wetherspoon, up 0.75p to 318.75p, disclosed the sale of 375,000 shares at 319.25p by Tim Martin, the chairman of the pubs group. After the sale he retained a 19.4 per cent holding in the group of 32 million shares. At Voller Energy, 1.25p higher at 39p, John Brown, the chairman, bought 25,000 shares at 32p, while Colin Bonsey, the finance director, picked up 20,000 at the same price.

Egdon Resources put on 3.5p to 93p after the oil and gas explorer raised £5m from a placing of new shares by Seymour Pierce. The group will use the cash to develop its various prospects. Regal Petroleum rose 16.25p to 107.75p after it emerged that Capital Group, the heavyweight US investment fund, had raised its stake in the oil explorer to 8 per cent from 7.2 per cent.

Comino, which provides software to local government, soared 34p to 330p after its rival Civica tabled a 335p-a-share offer for the group. Finally, Cyan Holdings had its first day of dealings on AIM. The company raised £3.25m at 22p; its stock closed at 24.75p.