Go-Ahead surges to outperform weaker UK stock market

Fri May 23, 2014 4:09am EDT

* Mid-cap stock Go-Ahead surges on contract win

* FTSE 100 slips 0.3 pct

* Traders cite uncertainty over EU elections

* Early results show strong gains for anti-EU UKIP party

* FTSE has stalled after hitting new highs last week

By Sudip Kar-Gupta

LONDON, May 23 (Reuters) - Britain's top equity index slipped on Friday with uncertainty over European Union elections weighing on the market, although transport company Go-Ahead surged after winning a new contract.

Go-Ahead outperformed the weaker UK stock market to rise 7.4 percent after it won a contract to run the expanded Thameslink rail network in London.

Analysts at Panmure Gordon kept a "hold" rating on Go-Ahead's shares but said they would increase their earnings forecast on the company to reflect its new contract win.

However, the blue-chip FTSE 100 index was down by 0.3 percent, or 23.05 points, at 6,797.51 points in early session trading.

The FTSE climbed to 6,894.88 points last week, which marked its highest level since December 1999, but has since retreated from those highs.

Darren Courtney-Cook, head of trading at Central Markets Investment Management, said uncertainty over EU elections and voting this weekend in Ukraine - where authorities have clashed with pro-Moscow supporters - was weighing on equity markets.

Early results on Friday showed that Britain's anti-EU UKIP party had made strong gains in local elections.

"We've got geopolitical risks related to Ukraine and the EU elections," said Courtney-Cook.

The FTSE is up by around 1 percent since the start of 2014.

Many investors expect the FTSE to hit a record high of 7,000 points later this year, but the index has so far failed to breach the 6,900 point mark - which some traders have taken as a sign that a short-term pullback on the index is likely.

"This bull run is just looking a bit tired at the moment," said Hantec Markets analyst Richard Perry. (Editing by Ruth Pitchford)