* FTSE up 1.2 percent, M&A seen driving equities in 2011
* Vodafone up, AT&T to buy Deutsche Telekom U.S. operations
* Essar falls after results, project delays
By David Brett
LONDON, March 21 (Reuters) - Miners, banks and engineers
helped Britain's top share index move higher on Monday after the
recent Japan quake-related sell off, while telecoms were boosted
by M&A activity.
Mobile operator Vodafone <VOD.L> lent its weight to the
FTSE's strength, up 4.2 percent after U.S. group AT&T <T.N> said
it was planning to pay $39 billion for Deutsche Telekom's
<DTEGn.DE> T-Mobile USA. []
Deutsche Bank said the deal was positive for the long-term
value of the U.S. market and Vodafone's 45 percent stake in
Verizon Wireless. It also said investors might become concerned
Verizon might respond by making acquisitions, threatening its
dividends to Vodafone. BT <BT.L> was up 2.3 percent.
"We think M&A activity will continue to be the driving force
for equity markets during the course of the year," Henk Potts,
strategist at Barclays Wealth, said. "The two big drivers when
it comes to M&A activity is the price of the company and the
ability to pay; both of which look pretty good at the moment."
By 1145 GMT, the FTSE 100 <> was up 71.04 points, or
1.2 percent, at 5,789.17, heading for its third straight session
of gains. The index was still down around 4 percent in March.
JP Morgan said the 4-6 percent markdown in global equities
after the Japanese quake should only be short term "given that
loss of activity due to the (Japan) earthquake is likely to be
temporary".
It saw value in the insurance and automotive sectors, and
said miners and capital goods firms were good plays on emerging
markets outperformance and higher commodity prices.
Miners <.FTNMX1770> were among the top risers among London's
blue chip stocks, adding more than 12 points to the FTSE.
BROKER BOOST
Enginemaker Rolls Royce <RR.L> rose 2.9 percent, lifted by
an upgrade by Evolution Securities to "buy".
Weir Group <WEIR.L>, a supplier of industrial pumps and
valves, gained 4.1 percent after Credit Suisse upped its rating
to "outperform" on valuation grounds.
The positive broker comment lifted sentiment in the
engineering sector, with IMI <IMI.L> and GKN <GKN.L> 3.1 percent
and 1.7 percent higher respectively.
Banks <.FTNMX8350> were among the top performers as risk
appetite returned among investors, with Standard Chartered
<STAN.L> up 1.7 percent.
Citigroup said: "Standard Chartered's recent sell-off
creates an opportunity to buy a growth stock at a lower
multiple."
Meanwhile, Regus <RGU.L> jumped 12 percent after the
provider of flexible office space posted full-year results.
Oil prices <LCOc1> remained a threat to the global recovery,
hovering near recent highs, around $115 a barrel, as western
powers conitnued air strikes in Libya, threatening supplies in
the Middle East region. []
India-focused refiner and power generator Essar Energy
<ESSR.L> fell 6.1 percent after saying a number of key power
projects would be delayed, overshadowing full-year earnings
which beat forecasts. []
Technical analysts, however, remained wary of the support
behind the FTSE's recent rally.
"Currently the index is heading straight into resistance
between 5,823-5,877," a London-based analyst said.
"A failure at resistance could set the stage for a further
bearish decline to see the index reach lower for 5,445."
(Editing by Dan Lalor)
