FTSE Close: Aviva, Pru up; Cairn falls back
17.00 (close)
Inflation: Traders will watch economic news.
The FTSE 100 Index surged 1.4% today as investors were cheered by decent economic news and corporate results from across the Atlantic.
Wall Street's Dow Jones Industrial Average gained more than 1% early on after strong numbers from the likes of Asda owner Wal-Mart and Home Depot, as well as a bigger than expected leap in industrial production.
This left London's blue-chips up 74.5 points at 5350.6 as UK inflation - which fell to 3.1% in July - also failed to spring any unpleasant surprises.
The pound saw a weaker day, falling below 1.21 euros and 1.56 against the dollar.
Commentators cited relief at successful bond auctions by the Irish and Spanish governments boosting the single currency, while the greenback was helped by the stronger industrial data.
In London insurers again caught the eye with gains of more than 5% for both Aviva and Prudential. Aviva added 19.4p to 397.3p after Citigroup raised its price target on the stock and investors refused to rule out further developments in RSA's pursuit of the company's general insurance business.
Aviva has dismissed the £5bn approach but RSA said it remained open to talks after gathering the support of three major banks for a rights issue.
Buy-out group Resolution fuelled the speculation by revealing it planned further deals to add to the acquisitions of Friends Provident and Axa's UK life and pensions business.
One scenario being mulled by analysts involves Aviva's life assurance operation being taken on by Resolution, should RSA be successful in buying the general insurance division.
Resolution announced strong half-year figures from Friends Provident today, with sales up 42% to £458m and profits sharply higher at £157m.
Elsewhere Prudential cheered 28.5p to 583.5p as analysts at ratings agency Standard & Poor's praised the firm's strong recent financial performance.
Meanwhile, a rise in commodity prices helped stocks in the mining sector. Lonmin led the way, gaining 88p to 1582p to claim the Footsie's yellow jersey.
Other notable risers in London included British Airways, which improved 5p to 221.2p after airports operator BAA and the Unite union reached a deal to avoid strike action at major UK airports later this month.
Outside the top flight, shares in building services firm Rok rose 6% - or 1.25p to 20.5p - after it maintained its half-year dividend and said it expected a better performance in the second half of 2010. The optimism came despite recent operational difficulties at its plumbing division, which left the company with half-year losses of £3.8m.
Rival firm Connaught, which is in the grips of a financial crisis, fell 0.8p to 14.9p amid continued turbulence in the FTSE 250 Index stock.
The biggest Footsie risers were Lonmin up 88p to 1582p, Prudential ahead 28.5p to 583.5p, Aviva up 19.4p to 397.3p and Xstrata up 45.5p to 1059.5p.
The biggest Footsie fallers were BHP Billiton down 46.5p to 1916p, Cairn Energy off 6.8p to 486.4p, International Power down 2p to 362.7p and Diageo, which fell 5p to 1105p.
15.45: Positive news from across the Atlantic where the Dow Jones began trading on the front foot after strong numbers from the likes of Asda owner Wal-Mart and Home Depot, as well as a bigger than expected leap in industrial production.
The DJIA is 64.75 points higher at 10,366.76.
In London, the FTSE 100 stands 41.77 points better off at 5317.87.
14.30:
The FTSE 100 is 44.55 ppints higher on the dat at 5320.65.
12.45:
Insurers Aviva and Prudential posted gains of more than 3% today as investors continued to speculate about possible deal-making in the sector.
The rally for Aviva came after Citigroup raised its price target on the stock and investors refused to rule out further developments in RSA's pursuit of the company's general insurance business.
Aviva has dismissed the £5bn approach but RSA said it remained open to talks after gathering the support of three major banks for a rights issue. Buyout group Resolution fuelled the speculation by revealing it planned further deals to add to the acquisitions of Friends Provident and Axa's UK life and pensions business.
One scenario being mulled by analysts involves Aviva's life assurance operation being taken on by Resolution, should RSA be successful in buying the general insurance division.
Resolution announced strong half-year figures from Friends Provident today, with sales up 42% to £458m and profits sharply higher at £157m.
Aviva shares jumped to the top of the FTSE 100 risers board with a gain of 3% or 13.4p to 391.3p, while Prudential added 17p to 572p.
11.50: The FTSE 100 is having a good day - up 59.32 at 5335.42 as lunchtime looms.
Market sage David Buik, of BGC Partners, reckons its all down investors covering short positions. He said: 'There is little doubt that the market has been "short" and there is evidence of covering short positions today. So, with small volumes prevailing we have seen the FTSE 100 rally by 1.1% at 5334, which is probably more than it deserves to be up.' 10.10:
The FTSE 100 is up today, led higher by miners enjoying higher commodity prices while inflation data came in on target.
The Footsie shrugged off a slow day yesterday to rise in early trading. By 10am the blue chip index was 29 points higher at 5305.1 and 90 of the 100 leading companies were in positive territory.
Miners took centre stage after a rise in commodity prices helped stocks in the sector to gain by as much as 2%.
Eurasian Natural Resources led the way, up 25.5p, or 2.7%, to 956.5p. Kazakhmys rose 23p to 1199p and Antofagasta lifted 18p to 1021p
Other notable risers included British Airways, which improved 3.6p to 219.8p after airports operator BAA and the Unite union reached a deal to avoid strike action at major UK airports later this month.
There was also a decent session for Argos and Homebase owner Home Retail Group, which climbed 3.8p to 220p, while Segro lifted 3.7p to 276.7p in a decent session for the UK property sector.
Yesterday's top rise, Cairn Energy, gave up some of those gains, and was among the few stocks lower today - 9.2p down at 484p.
Outside the top flight, shares in building services firm Rok jumped 8% - or 1.5p to 20p - after it maintained its half-year dividend and said it expected a better performance in the second half of 2010. The optimism came despite recent operational difficulties at its plumbing division, which left the company with half-year losses of £3.8m.
Rival firm Connaught, which is in the grips of a financial crisis, fell 1.45p to 14.3p amid continued turbulence in the FTSE 250 Index stock. Sterling briefly fell and gilt futures briefly rose on Tuesday after data showed UK consumer price inflation came in line with expections.
The Office for National Statistics said annual CPI rate slowed to 3.1% from June's 3.2%, in line with forecasts.
That was the lowest since February but the eighth consecutive month that it has exceeded the Bank's 2% target.
Sterling slipped but recovered to trade around $1.5655, slightly higher than $1.5648 before the data.
The euro rose slightly against the pound to €1.2123.
On Wall Street, bookmakers ahve the Dow Jones opening slightly up.
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