FTSE moves into positive territory

A mixed bag of corporate results failed to prevent the London market from following New York into positive territory today.

A gain in US consumer confidence and a further slide in oil prices meant the Dow Jones Industrial Average climbed more than 2% and in turn sparked a 74.9 points rise for the FTSE 100 Index to 5394.1 by mid-morning.

Insurers were higher after results from Aviva, but Lloyds TSB offered the biggest blow to sentiment when half-year profits came in slightly below market estimates. The bottom-line figure fell 70%, with the bank hit by a higher-than-expected writedown charge as a result of its exposure to credit turmoil.

With Goldman Sachs cutting estimates in the wake of the results, Lloyds fell 4% or 12.5p to 308.5p. Halifax Bank of Scotland, which is due to announce figures tomorrow, stood 2.75p lower at 270p.

Retailers were also on the fallers board after Next said it did not expect any improvement in trading over the second half of its financial year. Next dropped 21p to 984p, while Marks & Spencer eased 3.75p to 259p.

Norwich Union owner Aviva was one of the biggest risers, up 22.25p to 489p, after the insurer posted half-year operating profits in line with market forecasts and chief executive Andrew Moss spoke of a strong balance sheet.

Car insurer Admiral added to a strong session for the insurance sector after it reported a 16% rise in half-year profits and said it had seen signs of a pick-up in motor premiums following a long period of stagnation.

Elsewhere in the sector, Prudential rose 21.5p to 533p, RSA Insurance added 3.9p to 130.3p and Legal & General cheered 4.4p to 97.9p.

British Airways continued to rise after yesterday’s news of a potential merger with Spain’s Iberia. Shares were 11.25p higher at 259.75p.