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FTSE ends higher as techs offset BT tumble

LONDON: The UK's FTSE 100 index closed modestly higher on Wednesday, as powerful gains by Vodafone and other technology stocks offset a sharp slide in stock.

With gainers narrowly outnumbering decliners by 54 to 45, the UK benchmark index rose just 11.9 points or 0.2 percent to 6,302.8.

Vodafone climbed 7.5 percent, adding about 42 points to the UK index in the process, amid ongoing expectations the mobile phone giant will win its bid to buy Mannesmann, and as investors piled in to lift their weightings in the stock.

But BT showed a darker side to the telecom sector, tumbling 17.6 percent, after the company said savage competition for UK customers was ripping into its profits and had forced it to axe 3,000 management jobs. The stock's fall wiped 68 points off the index. Market turnover reached an impressive 1,982 million shares by the official 1630 GMT end of trading, with Vodafone and BT accounting for around 35 percent of the volumes.

CMG was easily the biggest FTSE 100 gainer, surging to a life-time high on news of a deal to supply Vodafone with its Internet-enabling Wireless Application Protocol. The shares surged around 28 percent. News of the deal pushed software developer Logica up over 20 percent, while sector peer Misys climbed 7.6 percent and microchip designer ARM Holdings 9.3 percent.

Dealers said the brisk activity in individual stocks overshadowed the underlying market tension ahead of the key U.S. Federal Reserve decision on interest rates due at about 1915 GMT.

They said most market players were expecting a 25 basis point hike but added the accompanying statement was also of key significance.

"How we (the UK market) tomorrow really depends on how the Fed put the message across and what the mood after that is," said the head of pan-European trading at a leading investment bank. WOOLWICH JOINS THE WAP TECH PARTY

Elsewhere, the excitement over wireless technology extended to mortgage bank Woolwich, the shares rising 11.5 percent on news the group was to offer interactive banking using WAP technology on mobile phones.

Demand for growth issues such as telecoms and IT shares left cyclical and defensive stocks looking weak.

Mining group Billiton, and utility groups PowerGen, United Utilities UU.L and Scottish Power all fell as much as 4.6 percent. From a chart point of view, technical analysts saw the FTSE 100 index testing support at between 6,100 and 6,150 in the next few weeks before heading higher.

"There is a good chance we could touch the 6,100 level in the short-to-medium term, and then have more of a sideways move before turning upwards," said Sam Freeman of Trend Analysis Ltd.

"But 6,000 however obvious is the key support level," he added.

Outside the leading blue chip stocks, the FTSE 250 index of medium-sized stocks dropped 43.5 points or 0.7 percent to close at 6,120.5.

Magazine group EMAP EMBATTLE was a prominent faller, closing down 10.3 percent after HSBC downgraded the stock to "reduce" from "hold".