* FTSE 100 up 0.3 percent
* Traders expect FTSE to challenge 6,900 point level soon
By Sudip Kar-Gupta
LONDON, June 20 (Reuters) - Britain's benchmark equity indexrose on Friday as a surge in the shares of drugmaker Shire (Dusseldorf: S7E.DU - news) lifted the stock market, which many traders expected toinch further towards record highs in coming days.
Shire hit all-time highs and was up by more than 10percent at 4,134 pence after rejecting a bid from AbbVie Inc (NYSE: ABBV - news) which would have valued the group at around 27 billionpounds ($46 billion).
Even though Shire rejected the bid, many traders expectedShire to remain a takeover target. The broader pharmaceuticalssector is experiencing a wave of merger and acquisition (M&A)activity, as highlighted by Pfizer (NYSE: PFE - news) 's recent attempt tobuy AstraZeneca (NYSE: AZN - news) .
"We've been quite bullish on pharma stocks due to the M&Afor quite some time. We haven't sold Shire after the spikehigher, we're just holding onto it," said Dafydd Davies, seniortrader at Prime Wealth Group.
TRADERS STAY BULLISH
Shire's gains added the most points to the FTSE 100, andayondo markets' senior trader Jordan Hiscott said Shire's sharescould go up to the 5,000 pence level.
The FTSE 100 was up by 0.3 percent, or 21.30 pence, at6,829.41 by the middle of the trading day.
Traders remained bullish on the index, which is sittingwithin reach of a record high 6,950.60 set in 1999.
Although the FTSE 100 is only up by around 1 percent sincethe start of 2014, many traders say the FTSE should rally morestrongly if it can get past the 6,900 point level.
"I think the FTSE is a buy at these levels," said Mark Ward,Sanlam Securities' head of trading, who expected the FTSE to hit6,900 points in the coming days.
($1 = 0.5864 British pounds) (additional reporting by Tricia Wright; Editing by CatherineEvans)
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- Mergers, Acquisitions & Takeovers
- FTSE 100