October 6, 2017 / 9:06 AM / in 2 months

Britain's FTSE scales 2-month peak

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* FTSE 100 up 0.1 pct

* Softer sterling helps consumer stocks, pharma

* easyJet falls on mixed update, price target cut

* CRH declines after bid trumped

By Kit Rees

LONDON, Oct 6 (Reuters) - The UK’s top share index advanced on Friday, holding at its highest level in two months as a weaker pound boosted dollar-earning constituents such as consumer firms and pharma stocks.

A dip in the pound to its lowest level in one month helped buoy companies such as British American Tobacco and Imperial Brands, which advanced as much as 1.1 percent on the day.

Health stocks, which also source a sizeable chunk of their revenues from the United States, were among the biggest gainers. Heavyweights GlaxoSmithKline and AstraZeneca rose around 0.3 percent.

“It all lies on cable at the moment, because it keeps turning off day by day,” said John Moore, trader at Berkeley Capital, referring to the pound/dollar exchange rate.

“We’re actually still bearish on the pound so we’re still buying into the FTSE,” Moore said, adding that he expected to see new all time highs for the index soon.

Consumer staples added the most points to the index, along with financials and energy shares.

Last month sterling strength saw the FTSE 100 post a slight decline for September, but the currency has been losing steam after hitting its highest level since last year’s Brexit vote.

The FTSE was on track to post its biggest one-week gain since the beginning of August.

While individual moves were fairly muted, shares in budget airline easyJet dropped nearly 3 percent, the biggest FTSE 100 fallers, following a price target cut from broker Credit Suisse.

The airline also posted a mixed pre-close update, with analysts pointing to pricing pressures despite easyJet reporting a record summer and saying that it expected to reach the higher end of its profit range.

“Revenue trends are improving, but pricing remains under pressure,” analysts at Liberum said in a note.

Credit Suisse analysts saw some supportive factors, however.

“With Monarch’s failure, Air Berlin’s break up, Alitalia’s administration and Ryanair capacity cuts, we expect this confluence of positives must help EZJ (easyJet) pricing,” analysts at Credit Suisse said in a note.

Shares in building materials firm CRH also fell 1.4 percent after its offer for U.S. Ash Grove Cement Co was surpassed.

Reporting by Kit Rees; Editing by Keith Weir

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