* FTSE 100 trades flat
* Glaxo falls after fraud office opens criminal
* Smith & Nephew spikes on bid rumours, subsequently denied
* Weir retreats after walking away from Metso
By Tricia Wright
LONDON, May 28 British blue-chip shares traded
flat on Wednesday, with GlaxoSmithKline a big faller
after domestic authorities launched a criminal investigation
into its commercial practices.
The drugmaker fell 1.7 percent on the fraud office probe
which poses a new challenge for the firm, already facing claims
of bribery in China and four other countries.
Traders, however, bet that Glaxo's losses would be limited.
"As much as the allegations are serious, at this stage that
is all they are (- allegations)," said Jordan Hiscott, senior
trader at ayondo markets, who reckoned on the share price
bottoming out around current levels on the probe news.
Among other big movers, Smith & Nephew jumped 17.5
percent to a record high of 1,120 pence on rumours U.S. medical
devices manufacturer Stryker Corp intended to make a bid
for its UK rival.
But the shares lost ground after Stryker's denial to be up
just 3.6 percent.
Engineering group Weir also retraced gains made
earlier in the session - after it abandoned efforts to acquire
rival Metso when the Finnish company rejected a
second, improved takeover bid.
Investors concerned the UK firm might overpay expressed
relief that the bid had been snubbed before shifting their
attention to the possibility of another planned takeover that
could engender further uncertainty. Its shares fell 1.4 percent.
"That might have opened Weir's hand in terms of its
acquisitive nature. In other words, even if this Metso thing
isn't going to happen, that's not to say they won't be looking
elsewhere potentially," said Richard Hunter, head of equities at
The FTSE 100 was down 1.38 points - flat in
percentage terms - at 6,843.56 points by 1442 GMT. The index of
British blue chips rose 0.4 percent on Tuesday, and is now just
0.7 percent shy of May's 2014 high.
That peak is the last resistance level before all-time highs
set in December 1999. Wednesday's trade saw the index move
within 1.6 percent of its highest-ever level.
The FTSE is lagging other indexes including the DAX, which
has already hit new highs for the year.
Valerie Gastaldy, who heads technical analysis firm Day By
Day, said it was too early to tell whether the rebound on
Tuesday was the start of a challenge for new 2014 highs, and
noted that the move was made in low volumes.
"With those limitations, we do favour new high on the FTSE
100 at around 6,945 in June," she said.
(Additional reporting by Alistair Smout, Sudip Kar-Gupta and
Francesco Canepa, editing by Alister Doyle)