* FTSE 100 up 0.2 percent
* Utd Utilities rises after profit rise and dividend hike
* Share buyback lifts Compass Group
* AMEC hit by M&A report, ex-dividend
By Alistair Smout
LONDON, Nov 27 Britain's benchmark equity index
edged up on Wednesday, helped by gains in utility stocks after
United Utilities posted higher interim profits and lifted
A rise in the more defensive utility sector was complemented
by appetite for more risk-sensitive stocks such as banks after
German parties agreed a coalition deal two months after an
United Utilities moved on to the FTSE's leaderboard with a
1.5 percent gain after its profit rise, helping drag up rival
utility stocks such as Centrica and National Grid
United Utilities raised its interim dividend to 12.01 pence
from 11.44 pence, highlighting the dividend appeal of utility
stocks. According to Thomson Reuters StarMine data, the utility
sector offers a dividend yield of 4.8 percent - above an average
3.3 percent yield for the FTSE 100 overall.
"It's a cash cow, and we've seen a lot of upgrades on United
Utilities today. You might get a bit of regulatory pressure and
bad press about the need to control prices though," said Joe
Rundle, head of trading at ETX Capital.
"Despite that, there is upside on it and it will continue to
go higher, and this is a good opportunity to buy the stock."
The top individual riser was catering and services company
Compass Group, up 3.6 percent after launching a 500 million
pound ($810 million) share buyback.
On the downside, engineer AMEC was the biggest FTSE
faller, down 2.5 percent, with traders citing a report in the
Times that it was eyeing a takeover of Foster Wheeler.
AMEC also went ex-dividend on Wednesday, meaning investors
will no longer qualify for its latest dividend payout. This
accounted for about half of its fall.
"We've seen more activity than normal in AMEC ... When you
get involved in high-cost takeovers, the market expects to see
synergies and savings, but in the short term it's natural to see
some nervousness," said Alastair McCaig, analyst at IG.
AMEC was the most heavily traded stock on the index, already
having traded 100 percent of its 90-day average volume, compared
with the overall index trading just a fifth of its average.
The blue-chip FTSE 100 index was up 0.2 percent, or
10.75 points, at 6,646.97 points at 1140 GMT.
The index is up by around 13 percent since the start of
2013. While it has flatlined in November, charts supported the
view that it could resume its rally between now and the end of
The FTSE 100 bounced off of its 40-day moving average when
it rose at the open, and a cluster of support from moving
averages around the 6,600 level painted a supportive technical
picture for the index, ETX Capital's Rundle said.
Hartmann Capital trader Basil Petrides felt it could end
2013 at a record high of 7,000 points.
"We're still in a bull market cycle," he said.