* FTSE 100 rises to highest level in two weeks
* Index closes up 1.4 pct at 6,584.70 points
* AstraZeneca boosted by acquisition deal
* FTSE could end 2013 around 6,700 - Sunrise Brokers
By Sudip Kar-Gupta
LONDON, Dec 19 Britain's main share index rose
to a two-week high on Thursday, helped by gains in
pharmaceutical stocks and by a pledge from the U.S. Federal
Reserve to keep interest rates low.
Some investors expect the blue-chip FTSE 100 index
to rally into the end of 2013, forecasting gains of roughly
50-150 points between now and the end of this month.
The FTSE 100 closed up 1.4 percent, or 92.62 points, at
6,584.70 points, bringing its gains since the start of 2013 to
around 12 percent.
The FTSE's rise broadly tracked those of stock markets
worldwide after the Fed sugar-coated a surprise first cut to its
crisis-era bond-buying programme with a pledge to keep interest
Investors around the world took the Fed's decision to trim
the programme - which was aimed at boosting the overall economy
- by $10 billion to $75 billion a month largely in their stride,
considering it a modest step that a recovering U.S. economy
A rise in major pharmaceutical stocks such as AstraZeneca
and GlaxoSmithKline gave one of the biggest
lifts to the FTSE, as merger and acquisition (M&A) activity
provided the sector with a boost.
DIABETES JOINT VENTURE
AstraZeneca rose 1.1 percent after agreeing to buy
Bristol-Myers Squibb's stake in a diabetes joint venture
between the two drugmakers for an initial $2.7 billion, plus up
to $1.4 billion in additional payments.
Glaxo rose 1.6 percent.
"M&A activity in pharma is possibly going to give the FTSE a
bit of a kick higher," said Toby Campbell-Gray, head of trading
at Tavira Securities.
The FTSE was on track for its first weekly gain in seven
weeks, snapping its longest weekly losing streak since 2008.
Premier Asset Management fund manager Chris White forecast a
further 50-100 point rise for the FTSE 100 by the end of 2013,
while Sunrise Brokers equity strategist Christopher Mellor said
the index could end 2013 at around 6,700 points.
Mellor expected equities to continue to rise into 2014 as
economies gradually recover from the 2008 credit crisis.
Mellor said investors should favour sectors such as
industrial goods and carmakers, which often outperform when the
economic cycle improves.
"You should still keep beta in your portfolio and opt for
the more cyclical end of the market," he said.