FTSE 100 watch: Index rises as insurance sector recovers

on Mar 31, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Monday, March 31: The UK’s benchmark index has advanced today, led higher by insurance stocks which have recovered following Friday’s slump. Despite today’s advance, the FTSE 100 remains on track for its first quarterly fall since last June.

Rio Tinto (LON:RIO) has been among the top performers today, boosted by an upbeat broker note.
**Insurers prop up Footsie**
As of 11:23 UTC, Britain’s blue-chip index had added 10.48 points to be 0.16 percent up at 6,626.06 boosted by investor appetite for insurance stocks. Shares in Resolution (LON:RSL), Legal & General (LON:LGEN) and Aviva (LON:AV) have all advanced today after having posted hefty declines in the previous session.

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The insurance sector lost some seven percent on Friday after the Financial Conduct Authority (FCA) said that it planned to investigate into whether insurers were applying rip-off charges and substandard service to long-term customers. Insurance stocks however regained some ground after the FCA explained that the investigation would be limited. (Resolution share price: FCA issues clarification on old policies probe)

IG analyst David Madden told Reuters that the insurance sector was “seeing a bit of a relief rally”.
“The clarification on Friday afternoon helped the insurance sector pull back from the lows, but we’ve only recovered about half of the losses,” he added.
Resolution’s share price has added 1.69 percent to 301.30p so far today. Legal & General’s shares are currently trading 0.98 percent higher at 207.00p, while Aviva’s share price is 1.74 percent up at 478.40p.

Rio Tinto, Babcock surge
Rio Tinto’s share price has also advanced today after Credit Suisse reiterated its ‘outperform’ rating on the stock.
“Potential for shareholder returns at Rio Tinto is larger and could be sooner than any of its peer group including BHP,” Credit Suisse analysts said, as quoted by Reuters.
Rio Tinto’s share price is currently 2.16 percent up at 3,350.50p, while shares in BHP Billiton (LON:BLT) have edged 0.49 percent higher to 1,861.00p.

Shares in Babcock International Plc (LON:BAB) have rallied today after the company, along with its partner Fluor Corporation, was named as the preferred bidder for a £7 billion contract to decommission nuclear power sites across the UK. Babcock’s share price has added 4.33 percent to 1,348.00p.
Broader market sentiment has benefitted from speculation that the European Central Bank would announce stimulus measures this week after a flash reading of March consumer price data for the eurozone came in at 0.5 percent, falling short of the 0.6 percent forecast by Reuters-polled analysts.
**Quarterly fall**
Despite today’s advance, the Footsie remains on track for a decline this quarter dragged down by concerns over tensions in Ukraine and lacklustre data from China.
“If you look at the sell-off we’ve had compared to all the negative news we have, we would have seen a much worse sell-off if there wasn’t underlying strength in this market to start with,” IG’s Madden told Reuters.
**The FTSE 100 was 0.31 percent up at 6,636.17 points as of 12:15 UTC on March 31, 2014.**


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