A trader monitors the screen on a trading floor in London.

London - British drugmaker Shire surged on Friday after rebuffing a takeover offer and helped prop up the FTSE 100, which traders bet will inch further towards its record high in coming days.

Shire jumped 13.1 percent to a record high after rejecting a bid from AbbVie Inc which would have valued the group at around 27 billion pounds ($46 billion), the US firm said.

“In my opinion, the move higher in early trade confirms the growth potential for Shire is huge: as such I could see the stock stretching to at least 50 pounds,” Jordan Hiscott, senior trader at ayondo markets, said.

That would hoist the stock some 18 percent above current levels.

With its tax base in Ireland, where effective corporate tax rates are among the lowest in the world, Shire, with a mid-sized market value, has been seen as a prime takeover target for US drugmakers.

Panmure Gordon, which described Shire's rare diseases business as “one of the hottest assets in biopharmaceuticals”, said it was no surprise to see Abbvie's approach rejected, with the broker calling its offer “barely adequate”.

“Abbvie may be able to increase its offer to more than 50 pounds, which we believe will be required to make this deal happen”, the broker said, but added that would depend on circumstances regarding the possible benefits of tax inversion.

Panmure increased its price target for Shire to 4,626 pence - in line with AbbVie's latest offer - and re-iterated its “buy” recommendation on the stock.

Shire accounted for half of the FTSE 100's 18.69 point gain, or 0.3 percent, to 6,826.80 by 09:57 SA time.

The index rose 0.4 percent on Thursday after the US Federal Reserve reassured investors on monetary policy.

Traders remained bullish on the index, which is sitting within reach of a record high 6,950.60 set in 1999.

“I think the FTSE is a buy at these levels,” said Mark Ward, Sanlam Securities' head of trading, who expected the FTSE to hit 6,900 in the coming days.

In an otherwise quiet day, shares in TSB Banking Group Plc were trading at 296.1 pence in early trading following its stock market debut, up nearly 14 percent on the 260 pence price set for its initial public offering. - Reuters