UPDATE 2-Defensives push FTSE to one-week high as Shire soars

By Reuters / March 29, 2018 / in.investing.com / Article Link

* FTSE up 0.6 pct at close, regains 7,000-point level

* Shire soars on possible Takeda takeover bid

* Defensives rise, miners and energy stocks fall (Recasts, adds detail and chart, updates prices at close)

By Tom Pfeiffer and Kit Rees

LONDON, March 28 (Reuters) - A move into defensive stocks helped Britain's FTSE climb to a one-week high on Wednesday, shaking off broader concerns over the U.S. tech sector that rattled global equity markets. Shares in pharma firm Shire surged.

Shire Plc SHP.L jumped around 14 percent after Japan's Takeda Pharmaceutical Co 4502.T said it was considering a possible offer for the London-listed drugmaker see the possible strategic fit given the Japanese pharma's focus therapeutic areas of oncology, gastrointestinal and neuroscience, with Shire bolstering the latter two franchises," analysts at Jefferies said in a note.

The gains in Shire helped the FTSE recover early losses, as bad news about U.S. tech giants and fears of a trade war fuelled concern over valuations across global equities.

The FTSE 100 index ended up 0.6 percent at 7,044.74 points, whereas Europe's STOXX 600 .STOXX index rose 0.3 percent. Demand for defensive, bond-proxy-type stocks offset falls among cyclical sectors such as mining and energy. British mid caps .FTMC fell 0.2 percent.

Global trade tensions hit the value of key metals such as copper, and a surprise increase in U.S. crude inventories sent Brent crude futures LCOc1 back below $70 a barrel.

Tech stocks have come under pressure amid signs regulators might rein in the sector following years of strong growth and privacy concerns around Facebook FB.O and Google GOOGL.O .

Facebook shares are now down 14 percent this month.

"Everyone wants to know how far this tech sell-off has to go and how much it affects everyone else," said IG's Chris Beauchamp. "People can cope with a modest sell-off, but when you get to these proportions and it hits the strongest performers so hard ... it sends the signal that others can be vulnerable, too."

Defensive stocks such as utilities, however, gained as investors bought back into sectors that have been relatively unloved as bond yields marched higher, rendering their big dividends less attractive.

Unilever ULVR.L was among top FTSE gainers, rising 4.7 percent after UBS upgraded the consumer goods giant to "buy" on expectations of improving volume growth and operating margin expansion.

Capita CPI.L rose 1.5 percent after a person familiar with the matter said the outsourcing firm would publish a five-year transformation plan and details of a rights issue with its annual results on April 26.

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