Vodafone shines as FTSE 100 tops 7,500

How the tide turns. Yes, it made a record high last month, but June was a stinker, with 230 points wiped off the FTSE 100. However, it's all relative, and with markets winding down for summer we see key issues like Trump, central bank policy and valuations having only limited impact on direction.

In fact, as the chart below shows, the FTSE 100 has bounced off the lower trend line and broken above resistance at around 7,435. So far in July, the index is up over 200 points, or 2.8%.

According to technical analyst Alistair Strang this morning, a move above 7,508 could trigger a run up to 7,578 points "pretty hard to avoid". Well, the market traded as high as 7,515 Friday. Time will tell if he's right.

Bid action around Worldpay and subsequent 20% surge has played its part, but it's the mining heavyweights like BHP Billiton, Antofagasta and Glencore that have led the way on a weaker dollar. And who doesn't like the housebuilders? Persimmon and Barratt Developments are up 9% and 8% respectively this month.

Good to see Vodafone in the mix, too. Volatile since the EU referendum, the shares are up nearly 5% in July and within tuppence of an 11-month high.

The Vodafone story is all about growth and, while first-quarter results were hardly in knockout territory, a 2.2% increase in organic service revenue was better than expected.

Even India, where a vicious price war is forcing Vodafone to merge its operations with rival Idea Cellular, has at least stabilised quarter-on-quarter.

Management is certainly making all the right noises. Boss Vittorio Colao talks of a 'good start to the year' and the outlook for the 12 months is unchanged.

A surge in data traffic both in Europe and the Africa, Middle East, Asia Pacific is encouraging, and Vodafone's cost savings programme is on track, too, crucial in an era of only modest top-line growth.

A sharp acceleration in free cash flow following completion of the massive Project Spring investment programme, underpins both a significant forward dividend yield of 5.6% and the share price.

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