* FTSE 100 down 0.1 percent, still near two-week high
* ABF surges; Primark targets U.S. with first store openings
* Bid speculation lifts AstraZeneca for second day
* Ex-divs knock 8.7 points off index
By Tricia Wright
LONDON, April 23 U.S. expansion plans for
Associated British Foods and expectations of
consolidation in the drugs sector kept Britain's top share index
near a two-week high on Wednesday.
Clothing and food conglomerate AB Foods surged 8.8 percent,
its best one-day percentage gain for 14 years, after saying its
fast-growing clothing chain Primark is to set up in the United
States, while posting higher interim profits.
Panmure Gordon lifted its rating on AB Foods to "buy" from
Persistent bid speculation lifted AstraZeneca by 2.1
percent, and together ABF and AstraZeneca added most points to
the FTSE 100, in solid trading volumes, at around twice their
90-day daily averages.
"Associated British Foods have come out with a strong set of
numbers, while with AstraZeneca, the bid speculation is the key
headline that's still in the background," London-based Prime
Wealth Group senior trader Dafydd Davies said.
AstraZeneca's rise built on a 4.7 percent gain on Tuesday,
after The Sunday Times reported a possible $100 billion bid from
Both companies declined to comment on the report, but the
prospect of deal-making in the sector also lifted Shire
and GlaxoSmithKline for a second consecutive day.
The FTSE 100 - which on Tuesday hit its highest
intra-day level since April 4, at 6,706.19 - closed down 7.02
points, or 0.1 percent, at 6,674.74 points.
Stocks trading without their latest dividend accounted for
all of the index's points drop, with Aggreko,
Antofagasta, BG, Centrica, Legal &
General, Mondi, Old Mutual and Rolls
Royce knocking off 8.7 points.
While some analysts said that a rebound in corporate
dealmaking could offset concerns surrounding British firms in
terms of frothy valuations and a slashing of analyst forecasts,
the FTSE 100 is likely to be stuck in a range in the near term.
The index is trading on a 12-month forward price/earnings
ratio of 13.2, against its five-year average of 11 times,
Thomson Reuters Datastream shows.
Analysts have been steadily lowering profit forecasts since
the start of 2014, data from Thomson Reuters Datastream shows.
"We're churning around in a trading range of 6,200 to
6,800," Richard Buxton, head of UK equities at Old Mutual Global
"The market needs further evidence of growth in corporate
profits to underpin an assault of the all-time high of just
under 7,000," he added.
The FTSE 100 hit a peak of 6,867 points in late January,
near its highest level since early 2000, but has since slipped
back due to concerns over a slump in emerging economies and
tensions between Russia and Western powers over Ukraine.
Hantec Markets analyst Richard Perry said that if the FTSE
did not break above 6,706 points - the high point from earlier
in April - its near-term progress could be limited.
"If it does not get above 6,706 points, it could send out a
bit of a sell signal," he said.
(Additional reporting by Sudip Kar-Gupta; Editing by Ruth