LONDON MARKETS: AstraZeneca, Smith & Nephew Push FTSE To 7-week High

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- U.K.'s FTSE 100 index closed at its highest level in almost seven weeks on Thursday, with Smith & Nephew and AstraZeneca leading stocks higher after well-received corporate news.

The London benchmark advanced 0.4% to end at 6,703, marking its highest closing level since March 7.

The FTSE briefly dipped into negative territory in the afternoon after news reports said Russia launched military exercises near the Ukraine border in response to the latest clashes, in which at least five pro-Russian activists were killed, in eastern Ukraine. Given the "heightened risk" of a Russian attack, Ukraine put its anti-separatist operations in the eastern town of Slovyansk on pause, a senior security official said, according to The Wall Street Journal.

Smith & Nephew leads gainers

Shares of Smith & Nephew PLC led gainers in the London index, up 3.4%, after the medical-equipment company released favorable results from a new clinical study of its TRUCLEAR Hysteroscopic System -- a device to enable the removal of fibroids and polyps. The firm further benefited from an upbeat trading mood in drug sector after Zimmer Holdings Inc. (ZMH) agreed to buy fellow orthopedic device maker Biomet Inc. for about $13.35 billion in cash and stock.

Also in the U.K. pharma industry, shares of AstraZeneca PLC (AZN) climbed 3.3% after the drug maker confirmed its 2014 financial guidance. The company, however, posted a fall in first-quarter profit as sales of its best-selling drugs continued to be squeezed by generic competition.

Earlier in the week, AstraZeneca was among major advancers after a report that Pfizer Inc. (PFE) had approached the U.K. drug maker about a possible merger.

Anglo American PLC picked up 1.3%, after the miner said output rose in the first quarter, with iron-ore production up 10% due to solid performances from its two South African iron-ore mines.

Other mining firms tracked Anglo American higher, with shares of Rio Tinto PLC (RIO) rising 0.9%, and BHP Billiton PLC (BHP) 0.5% higher.

Barclays PLC (BCS) shares gained 1.3%, shaking off the bank's warning that a slowdown in fixed-income trading would push adjusted first-quarter profit lower than in the same quarter last year.

Unilever slides

On a more downbeat note in London, shares of Unilever PLC (UL) dropped 1.7% after the consumer-products giant reported a fall in first-quarter sales, as currency weakness across emerging markets continued to weigh on its performance.

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