Rebound in AstraZeneca props up FTSE

By Sudip Kar-Gupta

LONDON (Reuters) – A rebound in drugmaker AstraZeneca, on the prospect that a bid for the company may not be entirely dead, propped up Britain’s top share index on Wednesday.

AstraZeneca rose 2.4 percent to 44.08 pounds to add the most points to the blue-chip FTSE 100 index. The FTSE was up by 0.1 percent, or 6.03 points, at 6,808.03 points going into the close of trading.

AstraZeneca dropped 11 percent on May 19, after the company rejected a bid offer from U.S rival Pfizer, but several of AstraZeneca’s top institutional investors have urged the UK company to let Pfizer put its offer to them.

AXA Investment Managers said on Wednesday that AstraZeneca’s board of directors should not prevent Pfizer’s offer from being put to its shareholders.

Beaufort Securities sales trader Basil Petrides said such calls from shareholders to consider Pfizer’s bid were helping AstraZeneca’s shares recover some ground.

“There’s a small bounce on hopes that Pfizer might go hostile, but I wouldn’t want to trade Astra right now. It’s too risky to bet on Pfizer going hostile,” he said.

STALLING AFTER HITTING HIGHS

Supermarket chain WM Morrison was the worst-performing FTSE 100 stock in percentage terms, falling 2.5 percent after Deutsche Bank analysts cut their rating on the company to “sell” from “hold”, mainly on valuation grounds.

Last week the FTSE climbed to 6,894.88 points, which was its highest level since December 1999, but it has since lost ground.

Traders said the fact that the FTSE had failed to break above the 6,900 point level had induced some investors to go “short” and sell out to book profits on last week’s run-up.

“We’re in a bit of a no-man’s land at the moment. We’ve lost a little bit of froth but we’re not getting a lot of momentum either way,” said MB Capital trading director Marcus Bullus.

“I’d be more inclined to ‘short’ at the moment and book profits,” he added.

(Additional reporting by Tricia Wright; Editing by Toby Chopra and Susan Fenton)