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* FTSE 100 flat
* Tullow Oil drops on 607 mln stg share sale
* RBS rises as Natixis upgrades its view
* Circassia soars 28 pct on Astrazeneca drug deal
* Berkeley rises on rosier forecast despite London pinch
* Small-caps outperform European indexes
By Helen Reid
LONDON, March 17 British shares were flat on
Friday against weaker European markets, holding close to
Thursday's record high and set to post a weekly gain.
The FTSE 100 index was flat in percentage terms,
pressured by a stronger sterling, which jumped on Thursday after
outgoing Bank of England policymaker Kristin Forbes unexpectedly
voted for a rise in interest rates.
"Mixed appetite in commodities added to the stronger pound
could keep the appetite limited and point at a weekly close
below 7400p," said Ipek Ozkardeskaya, analyst at LCG Markets.
The blue-chip index was set for a 1 percent weekly gain.
Royal Bank of Scotland was the top blue-chip gainer,
up 1.9 percent after Natixis upgraded its view on the bank,
saying the investment thesis was reaching a turning point.
"The time is near when the long-standing strengths of the
core bank will outweigh the material drag of legacy items," the
Banks across Europe were outperforming the broader indexes,
after comments from European Central Bank policymaker Ewald
Nowotny raised the prospect of an interest rate rise in the
The bigger moves in British stocks were in mid-caps and
Tullow Oil dropped 15 percent, the top European
faller, after it announced a 607 million pound share sale to cut
its $4.8 billion debt burden.
The rights issue was offered at a 45.2 percent discount to
yesterday's closing price.
"We believe today's announcement provides sufficient
liquidity to get through 2018 but Tullow may still need to
refinance its $3.3bn reserve-base loan and/or farm-down Kenya to
avoid the risk of value leakage through project deferrals in
2019 and beyond," said UBS analysts.
London-focused housebuilder Berkeley rose to its
highest since the Brexit vote, up 5.5 percent after it forecast
full-year profits at the top end of market estimates despite
demand falling in the capital.
"Today's statement is a clear signal of the disconnect
between the new build and second hand market," said Jefferies
"While London-based estate agents are feeling the cold,
Berkely Group is warming itself in the Spring sunshine."
Valve maker Weir Group was up 3 percent and among
top European performers after Barclays upgraded the stock to
'overweight', forecasting double-digit order growth over
The small-cap index was outperforming other major
share indexes, up 0.2 percent as biotech company Circassia
Circassia gained 23 percent after it signed a deal
with Astrazeneca to develop and commercialise drugs
Tudorza and Duaklir, licenced by Spain's Almirall, in
The firm lost more than half its market value in June 2016
when its experimental cat allergy treatment failed a late-stage
It was set for its biggest ever daily gains.
(Reporting by Helen Reid, editing by Pritha Sarkar)