Rebound in AstraZeneca helps lift UK's FTSE 100

Wed May 21, 2014 12:03pm EDT

* FTSE closes up 0.3 pct at 6,821.04 points

* Rebound in AstraZeneca adds most points to FTSE 100

* FTSE in "no-man's land" at present -MB Capital

By Sudip Kar-Gupta

LONDON, May 21 (Reuters) - Britain's top share index edged up on Wednesday as shares in drugmaker AstraZeneca rebounded on the view that what appeared to have been an unsuccessful bid for the company may still have a chance of going through.

AstraZeneca rose 2.6 percent, adding the most points to the blue-chip FTSE 100 index, which closed up 19.04 points or 0.3 percent at 6,821.04 points.

Shares in the UK company had tumbled 11 percent on May 19 after it rejected a bid offer from U.S rival Pfizer. But several of AstraZeneca's top institutional investors such as AXA Investment Managers have urged it to let Pfizer put its offer to its shareholders.

Beaufort Securities sales trader Basil Petrides said such calls from shareholders to consider Pfizer's bid were helping AstraZeneca's shares recover some ground.

"There's a small bounce on hopes that Pfizer might go hostile, but I wouldn't want to trade Astra right now. It's too risky to bet on Pfizer going hostile," he said.

NO-MAN'S LAND

Supermarket chain WM Morrison was the worst-performing FTSE 100 stock in percentage terms, falling 2.2 percent after Deutsche Bank analysts cut their rating on the company to "sell" from "hold", mainly on valuation grounds.

Last week the FTSE climbed to 6,894.88 points, which was its highest level since December 1999, but it has since lost ground.

Traders said the fact that the FTSE had failed to break above 6,900 points had induced some investors to go "short" and sell out to book profits on last week's run-up.

"We're in a bit of a no-man's land at the moment. We've lost a little bit of froth but we're not getting a lot of momentum either way," said MB Capital trading director Marcus Bullus.

"I'd be more inclined to 'short' at the moment and book profits," he added. ($1 = 0.5935 British pounds) (Additional reporting by Tricia Wright; Editing by Hugh Lawson)