By Lionel Laurent
LONDON (Reuters) - Britain's top equity index advanced on Friday, nearing record highs, as real-estate stocks extended gains from a rebound in property prices and drugmaker Shire (L:SHP) got a lift from a positive product review.
The FTSE 100 (FTSE) rose 0.4 percent to 7,041.60 points, close to a record 7,065.08 points reached in March.
Even though uncertainty before next month's British election has weakened sterling
Sterling got another knock after the UK reported industrial output barely grew in February, but equity traders said a weak pound could help British exporters and that individual companies were still seeing a lot of positive developments.
Shire shares rose 5.2 percent, the biggest gain on the FTSE 100, from a U.S. Food and Drug Administration decision to grant a priority review to its application for lifitegrast, a dry-eye disease treatment. The stock was catching up to its U.S.-listed ADRs, which rose overnight, traders said.
Homebuilders Barratt Developments (L:BDEV) and Taylor Wimpey (L:TW) also rose more than 2 percent, as did property-listing company Zoopla (L:ZPLAZ), a day after data pointed to a rebound in British house-price growth in March.
"Whatever form a new British coalition government takes, the UK still has a massive need to build more homes," said Charles Hanover Investments' partner Dafydd Davies.
ITV AT 15-YEAR HIGH
TV and media company ITV (L:ITV) rose to a 15-year high after investment bank Morgan Stanley (NYSE:MS) raised its price target on the stock.
However, mining stocks including Anglo American (L:AAL), Glencore (L:GLEN) and Rio Tinto (L:RIO) fell, hit by a renewed slide in prices for iron ore.
While neither the Conservatives nor the Labour Party is forecast to win an overall majority in Britain's 650-seat parliament, Richard Buxton, the head of UK equities at Old Mutual Global Investors, said he was making no short-term portfolio changes and sticking to financial and cyclical stocks.
Buxton said investors prepared to take a long-term view on the market should use any drops in the FTSE before the May 7 vote to buy shares.