Market Report: Greece hopes help Aviva up as bid talk re-emerges

Vague bid mutterings around Aviva made a return last night as the insurer shot up the blue-chip index thanks to European leaders agreeing a deal on a bailout of Greece.

The group has been the subject of takeover chatter before, and yesterday the rumours were reheated as speculation spread that at least two of its European peers could be mulling over a possible approach worth 575p a share. Zurich and Allianz were among the names being discussed as potential aggressors, with market gossips saying the former could be tempted to try and acquire a UK company given the strong value of the Swiss franc.

However, there was widespread disbelief around the tale, with Panmure Gordon's Barrie Cornes saying its likelihood was "extremely low". The analyst added that there was little chance of corporate activity among the insurers at the moment given the number of issues currently involving the sector, including the controversial proposed Solvency II capital rules.

Instead, the company's advance of 16.9p to 420p was put down to rising optimism over the outcome of the emergency summit in Brussels on Europe's debt crisis. Aviva was also helped by Goldman Sachs, which said it could be the major beneficiary if MPs are successful in their attempts to persuade the Financial Services Authority to push back the implementation of upcoming regulatory changes.

The positive noises emerging from Brussels meant the financial stocks dominated the FTSE 100's leaderboard, helping the top-tier index to recover from an early fall and close 46.07 points higher at 5,899.89. Among Aviva's peers, Legal & General was bumped up 2.8p to 117.2p while Old Mutual charged forwards 3p to 131.4p.

The banks were also ahead, with the gold medal position taken by Barclays after a climb of 17.25p to 239.85p, and Lloyds Banking Group – up 2.65p to 47.56p – and Royal Bank of Scotland – up 1.94p to 36.05p – were not far behind.

AstraZeneca ticked up 59.5p to 3,092p after the drugs group received approval from the US Food and Drug Administration (FDA) late on Wednesday for its Brilinta heart product. Matrix's Navid Malik called it "positive news," saying the drug "is the only near-term product with reasonable sales to help to offset some of the upcoming generic exposure it faces," although he did warn that the FDA's ruling about what must be on the label "makes it less competitive".

There was a rise of 15p to 1,261p for Diageo in the wake of figures from one of the Guinness owner's rivals, Remy Cointreau.

The French drinks group, whose brands include Cointreau and Remy Martin, announced its like-for-like first-quarter sales had jumped more than 30 per cent, with demand in Asia proving particularly strong.

Less strong on news from across the Channel, however, was WPP which crept forwards just 1.5p to 722.5p. Although the advertising group's peer Publicis revealed higher revenue growth for the first half of the year than expected, the French company also saw its margins hit by an increase in operating costs.

There were a number of companies releasing updates yesterday, including Kingfisher, with the B&Q owner announcing figures for the second quarter. The group increased by 14.2p to 267.4p as the performance of its French operations impressed investors, although overall its like-for-like sales eased back half a per cent.

The retailer blamed trading conditions in the UK partly on the rather poor recent weather, and there was a similar theme to Britvic's interim management statement. The soft drinks company revealed its volumes over the last four weeks had dropped more than 8 per cent, citing the fact that June was the coldest month since 2001, as it slumped 4.1p to 363p on the FTSE 250. Elsewhere on the mid-tier index, Meggitt surged forwards 9p to 386.3p after the engineer announced it had delivered a £7m contract to provide BAE Systems – up 1.8p to 304p – with fuel bladders. With talk this week it could end up a blue-chip company after the next reshuffle, Guardian Stockbrokers' Atif Latif said the news "reinforces [its] growth story, which shows resilience in a tough defence market where budgets are being cut".

Meanwhile, Thomas Cook failed to see any joy from the Competition Commission's decision to give a provisional green light to the merger between its and the Co-op's high street travel businesses. The tour operator edged down 0.45p to 68p, as Peel Hunt's Nick Batram warned that the deal was "not the whole solution [to its UK issues] and could equally be another distraction".

On plus markets, Teknomining rose 57.5p to 165p – a jump of over 50 per cent – after the mining explorer released drilling results that, it said, demonstrated the "huge potential" of its licence areas in Turkey.

Suggested Topics
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
David Moyes and Louis van Gaal
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A cabin crew member photographed the devastation after one flight
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Life and Style
food + drink
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
Life and Style
Arts and Entertainment
The John Peel Lecture has previously been given by Pete Townshend of The Who, Billy Bragg and Charlotte Church
musicGodfather of punk will speak on 'free music in a capitalist society'
peopleAt least it's for a worthwhile cause
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments