Healthcare deal hopes push FTSE to 7-week closing high

* FTSE 100 index adds 0.4 pct

* Bid speculation boosts healthcare stocks

* Renewed Ukraine worries cap index’s advance

By Tricia Wright

LONDON, April 24 (Reuters) – Britain’s top share index hit a

seven-week closing high on Thursday, bolstered by expectations

of deal-making in the healthcare sector, though renewed tension

in Ukraine dented the market’s gains.

Smith & Nephew (LSE: SN.L – news) , Europe’s largest maker of artificial

hips and knees, led the blue-chip gains by rising 3.4 percent

after medical device maker Zimmer Holdings Inc (NYSE: ZMH – news) said it

would buy orthopedic products company Biomet Inc.

The acquisition – the latest in a burst of deal-making and

bids in the healthcare industry aimed at either gaining scale or

specialising in certain disease areas – supported a long-held

view that Smith & Nephew might itself become a target.

Trading volume in Smith & Nephew was strong, at 4-1/2 times

its 90-day daily average, contrasting with the FTSE 100 on about

three quarters.

“The whole healthcare industry is about to go through a

massive phase of consolidation; Smith & Nephew has always been a

potential target of bid speculation,” Joe Rundle, head of

trading at ETX Capital, said.

The FTSE 100 closed up 28.26 points, or 0.4 percent,

at 6,703.00 points, its highest close since March 7, though off

an earlier peak of 6,724.

AstraZeneca (NYSE: AZN – news) climbed 3.3 percent to a record high,

extending this week’s strong advance on Pfizer (NYSE: PFE – news) ‘s

reported interest.

Britain’s second-biggest drugmaker made no reference to the

Pfizer bid talk in its results statement on Thursday, noting

progress with new cancer drugs that might revive its fortunes as

it posted a 17 percent fall in core earnings per share.

The cancer drugs are seen as a big draw for the U.S. group.

Analysts at Deutsche Bank (Xetra: DBK.DE – news) said the figures looked consistent

with full-year guidance and, to a degree, represented the calm

before the storm as comparisons should worsen from the second

quarter, adding that much of the focus in AstraZeneca remained

on deal making.

AstraZeneca gave the biggest individual boost to the UK

benchmark by far, contributing around a quarter to the index’s

points gain, in heavy trade, at about twice its 90-day daily

average.

But the market’s gains were eroded after Russian Defence

Minister Sergei Shoigu was quoted as saying that Russia had

begun military drills near the Ukrainian border in response to

operations by Ukrainian forces against pro-Russian separatists

and NATO exercises in eastern Europe.

The news prompted investors to lock in profits on a rally

which earlier in the session saw the FTSE 100 break through the

top of the range in which it has traded in the last few weeks,

where the peak was 6,706 points.

“We are obviously still looking at an uptrend for the FTSE,

but until we get a daily close through that key resistance

metric, then you are probably going to see a sideways to

downside bias,” IG (LSE: IGG.L – news) chief market strategist Brenda Kelly said.

($ 1 = 0.5960 British pounds)

(Editing by Hugh Lawson)

Ftse Futures

[email protected]

You may also like...

Rules of Discussion on Healthcare deal hopes push FTSE to 7-week closing high

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is stricly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Memebrs are requeuested to flag any violations to keep Forum Clean