Drugmaker AstraZeneca drives FTSE to multi-week high

Thu Apr 24, 2014 7:52am EDT

* FTSE 100 index rises 0.7 percent
    * Bid speculation boosts AstraZeneca
    * Analysts target further 1 pct gain on index

    By Tricia Wright
    LONDON, April 24 (Reuters) - Gains in AstraZeneca driven by
bid speculation helped propel Britain's FTSE 100 to six-week
highs on Thursday, with analysts seeing scope for more gains on
the index after it moved above its recent range.
    AstraZeneca climbed 5.3 percent to a record high,
extending this week's strong advance on Pfizer's 
reported interest alongside a burst of other pharma deal-making.
 
    Britain's second-biggest drugmaker made no reference to the
Pfizer bid talk in its results statement on Thursday, noting
progress with new cancer drugs that might revive its fortunes as
it posted a 17 percent fall in core earnings per share.
    The cancer drugs are seen as a big draw for the U.S. group.
 
    Analysts at Deutsche Bank said the figures looked consistent
with full-year guidance and, to a degree, represented the 'calm
before the storm' as comparisons should worsen from the second
quarter, adding that much of the focus in AstraZeneca remained
on deal making.
    "The investment community seems to be focusing on the
corporate action theme at present rather than the fundamental
core near-term earnings," Jordan Hiscott, senior trader at
ayondo markets, said.
    "I think this theme will continue until either Pfizer makes
a confirmed statement on its intentions or an outright bid for
the stock."
    Trading volume in AstraZeneca was robust, already around its
90-day daily average by mid-session, contrasting with the
broader FTSE 100 on just a fifth of its average.
    AstraZeneca was the biggest single boost to the UK benchmark
by far, contributing around a quarter to the index's points
gain. 
    The FTSE 100, by 1103 GMT, had risen 46.76 points,
or 0.7 percent, to 6,721.50 points, trading at its highest level
since March 10. This pushed the index above the top of the range
it has traded in over the past weeks, whose peak was 6,706
points.
    "That's quite important technically; ideally we'd like to
see a close above there to confirm the upside traction,"
Barclays Capital analyst Lynnden Branigan said.
    Branigan targeted 6,785 - the 78.6 percent Fibonacci
retracement of the down move from late February to late March -
should the FTSE 100 close above 6,706. That would take it some 1
percent above current levels.
    ($1 = 0.5960 British pounds)
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