By Sudip Kar-Gupta
LONDON (Reuters) - Drugmaker Shire and TV group ITV nudged up Britain's stock market, enabling it to recover from earlier losses caused by concerns about Ukraine, after an airliner was shot down in the violence-ridden region.
The blue-chip FTSE 100 index, which had been in negative territory for much of the day, staged a late rally to close up by 0.2 percent, or 11.13 points, at 6,749.45 points on Friday.
Global stock markets had slumped on Thursday after the shooting-down over eastern Ukraine of a Malaysia Airlines Boeing 777 with 298 people on board.
World leaders demanded an international investigation into the plane crash, which could mark a turning point in the worst crisis between Russia and the West since the Cold War if it convinces reluctant Europeans to get behind tougher sanctions on Russia long sought by the United States.
However, a rally in Shire enabled the FTSE 100 to come off its earlier intraday lows. Shire rose nearly 4 percent, adding the most points to the FTSE, after U.S. rival Abbvie agreed a $55 billion (32.2 billion pounds) deal to take it over.
Merger speculation also lifted ITV by 3.8 percent, after cable group Liberty Global's decision to buy BSkyB's 6.4 percent stake in ITV boosted prospects of a wider bid.
In spite of the worries about the Ukraine conflict, some traders have said that corporate takeover activity, and the fact that equities offer better returns than bonds or cash, should enable stock markets to rally into the end of 2014.
"The geopolitical situation is quite jittery at the moment, but everybody is looking at the dip as a buying opportunity," said Novum Securities' technical analyst Adrian Slack.
Others, however, were more circumspect.
"We were buying the dips up until the plane crash. We are now a bit cautious and will not be taking new positions going into the weekend," said Mark Ward, head of trading at Sanlam Securities.
(Additional reporting by Andrew Winterbottom and Tricia Wright; Editing by Mark Heinrich)