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FTSE hits seven-week high but Shire's shine wanes
by Daniel Grote on Apr 29, 2014 at 16:50
The index rose 52 points, or 0.8%, to 6,752, having earlier reached 6,762, its highest level since early March. BP and St James's Place added to gains made in the morning's trading as investors continued to digest their solid results. BP rose 14.3p, or 2.9%, to 502.6p, while St James's Place added 15.5p, or 2% to reach 867.5p.
But Shire (SHP.L), the star performer of the morning (see below) gave away its gains, as the prospects of a takeover from US Botox manufacturer Allergan appeared to wane. Shares in the pharmaceutical group had surged after Reuters reported a bid was on the cards, but those gains were erased after reports Allergan was exploring a sale of its business to Sanofi or Johnson & Johnson, ruling out a bid for Shire.
Shire fell 23p, or 0.7%, on the news.
FTSE gets fresh drugs boost as UK growth disappoints
10:56 The red-hot pharmaceuticals sector continued to drive the FTSE 100 as a surge in the share price of Shire (SHP.L) helped to lift the UK blue-chip index.
Shire jumped 129p, or 3.9%, to £34.14 after a Reuters report said US Botox-maker Allergan was preparing a fresh takeover approach for the Dublin-based pharmaceuticals group. Allergan approached Shire about a potential takeover in recent months, but could not agree a deal.
Mike van Dulken, head of research at Accendo Markets, said the news showed 'the appetite for consolidation in the sector, notably for companies located in countries with lower tax where the newly combined entity can be headquartered'.
The FTSE 100 rose 33 points, or 0.5%, to 6,733, with gains tempered only slightly by the release of figures showing gross domestic product (GDP) growth of 0.8% in the first quarter of the year, below investors' expectations. The pound fell on the news to $1.6812 from around $1.6839 earlier.
Although slightly below forecasts, the GDP figure show the UK is experiencing its fastest annual rate of growth since 2007. Markit chief economist Chris Williamson said the expansion was 'all the more remarkable for having occurred despite extreme weather, including flooding, which affected many parts of the country'.
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