Insurance firms led the London market higher today as strong results and broker upgrades buoyed the sector.
Standard Life and Royal & Sun Alliance were the leading risers as the FTSE 100 Index held on to early gains to stand 31 points higher at 6339.8 by mid-morning.
The benchmark index was also supported by modest gains on Wall Street overnight after the Federal Reserve kept US interest rates on hold, although traders were digesting the Bank of England’s latest inflation report, which signalled the possibility of a further hike in interest rates at home.
Among blue-chips, an upgrade from Deutsche Bank for Standard Life helped the insurer move more than 6%, or 20p, higher to 346p following strong results yesterday.
More Than insurer Royal & Sun Alliance also saw better-than-expected results offset £120 million of flood-related losses. Investors were also cheered by the firm’s plans to make £70 million a year in cost savings, moving shares 5.6p higher at 141.6p.
Other gainers in the sector included Legal & General, 3.9p higher at 142.9p, and Friends Provident, which gained 2.1p to 194.6p despite warning that it would take longer than expected to achieve its new business profits targets.
Elsewhere in the financial sector Alliance & Leicester gained 4% on the back of trader talk over a possible bid from National Australia Bank, sending the stock 46p up to 1090p.
Broadcaster ITV also made a strong start, up 3.5p to 109.2p, after revealing that trading had improved in the early stages of its third quarter.
But water company Severn Trent moved in the opposite direction, down 19p to 1343p, as it said that flooding disruption could cost it up to £35 million, with only some of the figure set to be claimed back through insurance.
Miners also continued their poor run after losses in the previous session, with Xstrata down 46p to 2826p after a broker downgrade. Kazakhmys, the leading Footsie faller, was off 42p to 1184p, while Vedanta Resources lost 19p to 1650p.