Intertek outperforms as FTSE rises to near three-week high

By Sudip Kar-Gupta LONDON (Reuters) - Britain's top equity index rose to its highest level in nearly three weeks on Wednesday as expectations the U.S. Federal Reserve will signal it is in no rush to raise interest rates buoyed stock markets. Intertek was the top performer on the blue-chip FTSE 100 index following positive broker comments, with the FTSE itself closing up by 0.8 percent at 6,453.87 points. Shares in the company, which carries out tests and inspections to make sure that goods meet health and safety standards, climbed 5.1 percent. Traders attributed Intertek's rise to a decision by Citigroup to reiterate a "buy" rating on the stock, while JP Morgan also kept an "overweight" rating on the company after getting positive feedback from a meeting with its management. "Intertek's meeting with JP Morgan last night left them impressed," said Securequity sales trader Jawaid Afsar. Supermarket retailer Tesco also rose 2.1 percent. Traders shrugged off news that Britain's Serious Fraud Office was launching a probe into accounting errors at Tesco and bought up the beaten-down shares, which have fallen nearly 50 percent since the start of 2014. "There is so much negative news already out there on Tesco, that an announcement such as the one by the Serious Fraud Office will not be enough to prevent bargain hunters from coming in for the stock," Beaufort Securities sales trader Basil Petrides said. However, business services company Capita slumped 6.5 percent after it lost out to rivals, including Interserve, in a bid to help run the bulk of Britain's rehabilitation centres for low and medium-risk offenders. EXPECTATIONS OF DOVISH FED The U.S. central bank is expected to announce after a policy meeting that it is ending its bond purchases amid signs of strength in the U.S. economy, but it is also likely to reinforce its willingness to wait before raising interest rates after a volatile month in financial markets. The FTSE 100 hit a peak of 6,904.86 points at the start of September, its highest since early 2000, but it then slumped to 15-month lows in October as weak European economic data knocked back stock markets. "We're seeing evidence that people are anticipating a more dovish Fed in response to the slowdown in the euro zone and the disinflation that has been gripping many of the major economies," said Alpari UK market analyst Craig Erlam. (Additional reporting by Alistair Smout and Tricia Wright; Editing by Susan Fenton and Emelia Sithole-Matarise)