* FTSE 100 index dips 0.1 pct
* Outlook remains positive, record high eyed
* ITV slips after disappointing update
By Atul Prakash
LONDON, May 14 (Reuters) - Britain’s top share index retreated a touch from a 14-year high on Wednesday, with broadcaster ITV leading losses after announcing a drop in market share in the first four months of the year.
ITV fell 5.4 percent as analysts said its second-quarter guidance for net advertising revenue was just short of their 14 percent forecast and the company had to make an effort to get back on the front foot on audience numbers.
The benchmark FTSE 100 index was down 0.1 percent at 6,864.85 points by 1056 GMT after closing at its highest level since December 1999 in the previous session.
Traders were looking to see if the index, which has been underpinned in recent weeks by a burst of deal-making and bids alongside signs of a strengthening UK economy, can break above the all-time high of 6,950.60 points it set in 1999.
“We see the FTSE breaking 6,900, then moving to 7,000. We are not at the inflection point as yet where equities offer expensive valuations,” Atif Latif, director of trading at Guardian Stockbrokers, said.
According to Thomson Reuters Datastream, the FTSE 100 trades at 13.7 times its 12-month forward earnings, against a 10-year average of 11.7 times.
Analysts said the market was likely to be supported by a fast improving economic outlook going forward and price dips could prove to be good buying opportunities.
In a further sign that the UK economy was gathering pace, data showed the unemployment rate fell to its lowest level in more than five years in the first quarter.
“The FTSE remains underpinned by a strong domestic recovery and foreign bid speculation. Technically it also looks healthy,” Lex van Dam, a hedge fund manager at Hampstead Capital, said.
However, the Bank of England said it was still in no rush to raise interest rates because the recovery in the British economy remains in its early stages, suggesting it may only raise rates in about a year’s time.
Stocks trading ex-dividend, including Royal Dutch Shell , Glencore Xstrata and GlaxoSmithKline, also knocked some points off the FTSE 100.
On the positive side, Compass, up 3.3 percent, was the standout FTSE 100 riser after the caterer said it would return 1 billion pounds ($1.7 billion) to shareholders through a special dividend and raised its interim dividend to 8.8 pence per share. (Additional reporting by Tricia Wright; Editing by Susan Fenton)