M&A speculation was lifting stocks in the UK telecoms sector on Wednesday, with industry giant Vodafone surging on hopes of a deal with Liberty Global.Vodafone was trading over 5% higher in the afternoon session after US telecoms tycoon John Malone, the owner of Liberty Global, dropped heavy hints about a potential merger.Malone, speaking a day after the FTSE 100 telecoms company's somewhat disappointing results, said that that a long-rumoured combination between Liberty and Vodafone would be a "great fit".Deal speculation has been rife in the European telco sector after deals such as BT's proposed takeover of EE and Sky's agreement with Spain's Telefonica."There has been a fair amount of speculation by analysts about Vodafone joining up with Liberty in one form or another. Vodafone has acknowledged that, at a certain price, a merger makes sense," said analyst Tom Gidley-Kitchin from Charles Stanley.But some analysts suggested the comments were really a ruse to put pressure on Vodafone's board to break-up the company rather than actually force a merger.Nevertheless, Bank of America Merrill Lynch suggested that synergies from the hypothetical merger could total $20bn, though it admitted that the companies' valuations would be a "major stalling point" for any deal.Deal activity abroad was also helping to boost sentiment in the sector: French group Altice agreed to buy Suddenlink in a $9.1bn deal, while US outfit Charter Communications extended its merger talks with Bright House Networks.Top performing sectors so far todayMobile Telecommunications 5,401.09 +4.46%Forestry & Paper 16,361.69 +2.29%Mining 14,274.27 +1.02%Electronic & Electrical Equipment 4,474.68 +0.69%Banks 4,641.05 +0.65%Bottom performing sectors so far todayIndustrial Metals & Mining 1,780.65 -2.85%Real Estate Investment Trusts 3,467.59 -1.83%Electricity 9,897.90 -1.52%Personal Goods 26,934.18 -1.44%Food Producers & Processors 7,922.53 -1.37%