Drug stocks such as Glaxo and SmithKline Beecham, which derive a large part of their revenues from the US, rose after the rate rise there boosted hopes for continuing economic growth with low inflation. The worst performing sector was insurance, which fell 1.76 per cent. Stocks in this sector are vulnerable when interest rates rise as the value of their portfolios with large bond holdings fall. The Prudential won its bid for life insurer Scottish Amicable at a cost of pounds 1.75bn. Shares in the Prudential actually rose 9p to 567p.
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