Insurers boost FTSE

Insurers provided a boost to the London market today as investors welcomed an upbeat set of results from Prudential.

The Pru lifted more than 2% after posting a 31% hike in half-year profits – a performance that benefited a string of other insurance companies.

This contributed to the Footsie closing 7.4 points higher at 5263.6 as traders digested the latest batch of updates in the middle of a busy week for corporate results.

While the Pru gained 12p to 536.5p, it was beaten to the top of the Footsie risers board by Norwich Union owner Aviva, up 3% or 20p to 656.5p. Old Mutual also lifted 2p to 130.5p.

Aerospace group BAE Systems made significant progress after broker ABN Amro upgraded its recommendation on the stock to buy from hold and raised its price target to 340p from 250p. BAE’s stock lifted 6.5p to 301.75p.

Shares in gas explorer BG Group advanced 5p to 475p after it said it would reward investors with a 10% dividend hike following a 44% increase in half-year earnings.

However, supermarket group Morrisons failed to hold on to early gains prompted by news of a 5% rise in like-for-like sales. Investors in Morrisons initially showed their relief that the company had stuck by recently-lowered profits forecasts, but the shares later returned to their opening mark of 187p.

Telecoms stocks also gave back some of yesterday’s gains with O2 the main casualty after a major US investor placed shares for sale worth more than £500 million. O2 slipped 5p to 137.75p – a drop of more than 3% – while Vodafone lost 1.25p to stand at 147.5p.

Outside the top flight, Egg shares rose 2.5p to 112.25p as the online bank returned to the black and investors learned that owner Prudential was keeping its options open over the possible sale of its 79% stake.

Among other companies in the news today, United Business Media rose 4% or 20p to 547.5p after half-year figures came in ahead of expectations.

Avis Europe was another on the up – nearly 3% or 1.5p stronger at 52p – as investors expressed relief that the car rental firm had attracted a healthy response to its rights issue.

Nuclear power generator British Energy advanced 7.75p to 396.75p as the restructured company posted profits on the back of higher ower prices.

And shares in Wyevale Garden Centres put on 7.75p to 532p as traders continued to warm to yesterday’s news that it had received a number of expressions of interest in the firm.

Elsewhere, shares in MyTravel were heading south – down 6p at 195p – after it said the dual impact of hurricanes and bombs in Egypt would cost it around £2 million.

The highest Footsie risers today were Aviva up 20p to 656.5p, British Airways rising 6.75p to 280p, Prudential up 12p to 536.5p and BAE Systems adding 6.5p to 301.75p.

The heaviest fallers were O2 down 5p to 137.75p, Yell off 10.5p to 449.5p, Exel down 21p to 927p and Cable & Wireless off 1.75p to 157p.