Admiral is stalling, with the car insurer releasing what amounted to a thinly veiled profit warning.
It revealed group turnover slipped by 9 per cent to £1bn in the first six months of the year, due to a continued squeeze on UK car insurance premiums. Berenberg’s Peter Eliot thinks an earnings downgrade will follow, and is advising investors to get out now.
Admiral also announced its first bond issue, raising £200m to “strengthen and diversify” capital ahead of new EU solvency rules for the industry, set to take effect in 2016. Mr Eliot noted that “some will no doubt question the need for debt and the reasons for its issuance”. Admiral slipped 52p to 1,522p.
Elsewhere in the sector Aviva lost 18.6p to 493.9p after the new targets it set itself were seen as unambitious by the market.
The weakness in the sector pushed the blue-chip FTSE 100 to its lowest ebb since April, down 20.41 points at 6,718.04.
Traders took a second look at airlines after their battering on Tuesday: easyJet flew up 39p to 1,287p, while British Airways and Iberia-owner IAG recovered 4.1p to 340p.
Rentokil Initial bounded up 3p to 115.6p thanks to kind words from Credit Suisse. The bank is impressed with the company’s streamlining and the growth of its core pest control business, speculating that M&A could be on the horizon.
But the bank took a dimmer view of TSB, the recently floated bank, with an underperform rating and predicted earnings will drag until at least 2017. TSB slipped 2.25p to 281p.
Punters took a gamble on online gaming specialist 888 after an unscheduled upbeat trading statement. The online casino operator said it expects to post first-half earnings “significantly” better than last year. 888 jumped 4.75p to 125p.
Specialist drug company Plethora Solutions, which develops a treatment for premature ejaculation, crept 0.12p higher to 10.87p amid rumours that the AIM-listed company could be close to announcing a new joint venture deal.
Roxi Petroleum leapt 5.25p to 9.25p on AIM after announcing an oil and gas discovery at its flagship BNG site in Kazakhstan.