* FTSE 100 advances 0.3 pct
* RBS, InterContinental Hotels jump after earnings
* Earnings in the UK outperforming Europe
* AstraZeneca rejects Pfizer's raised bid
By Tricia Wright
LONDON, May 2 Britain's top share index hit a
fresh two-month high on Friday, with RBS and
InterContinental Hotels the most notable risers on the
back of robust earnings, as investors also welcomed strong U.S.
Shares in AstraZeneca, which have surged almost 30
percent since U.S. rival Pfizer indicated in April it wanted to
buy the British drugmaker, were flat after a sweetened $106
billion takeover bid was rejected by AstraZeneca's board.
Part-nationalised RBS surged 9.2 percent, the top FTSE 100
riser, after trebling its profit in the first quarter,
benefiting from improved cost control and a reduction in losses
from bad loans.
Jefferies said the bank's earnings were more than twice
consensus estimates, with impairments 48 percent below forecast.
Also rising after robust results was InterContinental Hotels
Group, which proposed a special dividend along with its
strongest room revenue performance in seven quarters. Its shares
jumped 8.1 percent.
"InterContinental has delivered a stellar performance.
Growth in revenue per available room is ahead of expectation ...
while the return of hotel sale proceeds in the form of a special
dividend is ahead of schedule," Hargreaves Lansdown Stockbrokers
equity analyst Keith Bowman said.
Meanwhile, non-farm payrolls showed the U.S. economy added
288,000 jobs in April, beating a 210,000 consensus forecast and
fuelling the view that the world's biggest economy is regaining
pace after bad weather hit growth early in the year.
RBS, IHG and the encouraging U.S. data helped lift the FTSE
100 by 17.03 points, or 0.3 percent, to 6,825.90 points
by 1506 GMT, a fresh two-month high.
Of companies that have reported quarterly earnings so far,
82 percent of FTSE 100 companies have beaten or met
expectations, compared to 57 percent of STOXX Europe 600
However, only 18 percent have met or beaten forecasts for
revenues on the FTSE 100, Thomson Reuters StarMine data showed.
"(The StarMine) figures tell you everything you need to
know. There's been greater weakness in the top line in general,
and the bottom line has been artificially boosted by things like
share buybacks," said Charles Stanley analyst Jeremy
While flagging that the FTSE 100 has come up against strong
resistance around the 6,800 level, traders were optimistic about
the UK benchmark's near-term prospects.
"Risk appetite seems to be back on the table," Matt Basi,
head of sales trading at CMC Markets, said. "If we can really
build a solid footing at these levels ... then there's a chance
that we could really push on and have a look at that 7,000 level
for the first time."
Equity markets have been buoyed in the last two weeks by a
burst of deal-making and bids largely in the healthcare sector.
Shares in AstraZeneca were 0.1 percent lower at 4,811 pence
on Friday after the company's board rejected Pfizer's
revised offer of 50 pounds ($84.47) a share, saying it
substantially undervalued the drugmaker.
($1 = 0.5919 British pounds)
(Additional reporting by Alistair Smout; Editing by Susan