OPTIMISM that next week’s analyst presentation by Vodafone Group will underpin confidence in its growth strategy helped to leave the FTSE 100 with a modest gain.

The £95 billion mobile giant will set out its stall on Monday in its annual analyst day. Although Morgan Stanley does not expect the company to provide any update on earnings guidance, it flags several key areas that should highlight Vodafone’s ability to continue to grow and take market share in Europe.

These include the recent success of its 3G laptop cards in Germany, which accounted for 4.1 per cent of service revenue growth in the first quarter, and the strong initial take-up of Vodafone Passport, which was launched in six markets at the beginning of June.

Taken together with a focus on costs at its One Vodafone venture and the belief that trading at Vodafone Japan — which the American broker values at £9 billion — is unlikely to deteriorate further, it repeats its overweight rating and 175p target. Nick Delfas, analyst, concedes that the key risks to such a level being met is the possibility of further weakness at Verizon Wireless, the American mobile operator in which it holds 45 per cent. In addition, investor clamour for the company to return cash when it files first-half figures in November could cramp management’s ability to pursue acquisitions.

Vodafone firmed 2½p at 152½p, enabling the the FTSE 100 to turn a midday 12-point deficit to a 9.4 gain at 5347.4 by the close. Next fared best, adding 38p at £14.90 on last-minute position-taking before its interims today.

A £1.9 billion American consortium bid approach for Drax, the owner of Europe’s largest coal-fired power station, was felt elsewhere among generators, sending International Power up 4½p at 237¼p as Cazenove raised its price target from 250p to 260p. The broker argues that the impact on the valuation of other British coal-fired power stations is positive.

BAT advanced 17p at £11.72 as JPMorgan noted that state supreme court rulings in two closely followed American class actions — the Engle and Price cases — could come as early as today. The US broker points out that the resolution of these actions would leave the US Department of Justice as the only outstanding litigation, meaning greater share price upside. Goldman Sachs was also positive, citing its preference for tobacco stocks over their food and beverage peers, and BAT in particular. Wolseley rose 13p at £11.63 as Citigroup repeated its buy advice in a review of European building and construction stocks.

• NEW YORK: Stocks tumbled as a new spike in oil prices took the spotlight away from a mixed set of economic reports. The Dow Jones industrial averaged closed 52.5 points lower at 10,544.90.

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