* FTSE 100 flat at 6,587.74
* Morrison rises on short covering post results
* AMEC gains after pulling out of Kentz deal
* Aggreko falls on earnings worries
By David Brett
LONDON, Sept 12 Grocer Wm Morrison led the
gainers among Britain's leading shares on Thursday after posting
its first-half results but the index continued to toil around
the 6,600 level.
Wm Morrison Supermarkets rallied 2.2 percent with
traders citing dividend, outlook, and valuation attractions as a
trigger for short covering after the firm's first-half results
came in just shy of expectations.
Wm Morrison, the UK's fourth biggest supermarket, is the
10th most shorted stock - bets the share price will fall - on
London's blue chip FTSE 100, according to data from Markit,
while 22 out of 25 analysts covering the stock rating it as
either a "hold" or "sell".
AMEC, meanwhile, climbed 2.2 percent after the
British engineer said it will not make an offer for oil and gas
construction firm Kentz, as it continues to try to
expand in Australia, Africa and the Middle East.
Kentz slid 10 percent.
The FTSE 100 was flat at 6,587.74, by 1413 GMT, in a quiet
session - the index traded just 54 percent of its 90-day daily
average volume - with the healthcare sector posting the biggest
AstraZeneca added most points among drugmakers,
rising 1.2 percent after French peer Sanofi withdrew
its U.S. application for diabetes treatment lixisenatide, which
shares the same mechanism as AZN's Byetta/Byduren which is
already on the market.
Panmure Gordon said lixisenatide's delay to 2016 at the
earliest allows AZN more room to grow the product and asked more
broadly if now might be the time to buy AZN's shares with the
sequence of market downgrades for the stock beginning to level
The broader index, however, continues to struggle to breach
6,600 - a level it has closed above just once since early
Steve Ruffley, chief market strategist at InterTrader, said
the FTSE 100 was seeing technical resistance at 6,569.65 and
higher at 6,616 but with firm support not far away the index was
likely to keep in a tight range.
"We have support at 6,479 and 6,434. With the speculation of
Federal Reserve stimulus easing on the cards there may be some
dip-buying opportunities," he said.
Aggreko fell 2.2 percent with traders citing a note
from Deutsche Bank as the catalyst. The investment bank cut its
target price on the company by 11 percent to 1,870 pence and
gave a cautious outlook for earnings.
Aggreko, which released two profit warnings late last year,
is currently the third most shorted stock on the FTSE 100 with
near 25 percent of the stock available for loan being utilised
by investors betting the stock will fall, data from Markit
Miners were the main sectoral weight on the index, giving up
some of their recent gains which had been secured following more
robust global economic data.
But the British stock market is set to rise 30 percent in
the next two years as the country's economy recovers, boosting
stocks with a domestic exposure such as banks, retailers and
real estate firms, according to Bank of America - Merrill Lynch.
"Recent economic data reinforced the growing sense that the
UK economy is emerging from its longest period of
underperformance since the 1930s," they said in a note.
They expect the blue-chip FTSE 100 index, which accounts for
85 percent of the total market cap, to hit 7,400 points at the
end of 2014, from 6,579.96 points currently.
(Reporting by David Brett; Editing by Toby Chopra)