* 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 (Reuters) - 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 rates low.
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 could withstand.
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.
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.