Market Report: Insurers boost top tier despite news from Japan

The top-tier index was covered in blue last night as it finally managed to bring to an end a run of six straight sessions of falls. The challenge for investors, however, was to separate the stocks that were over-sold after the tragedy in Japan from those merely experiencing a dead cat bounce.

Events in the country have played their part in the FTSE 100 losing over 6 per cent in that period, but yesterday it managed a surge of 97.88 points to close at 5,696.11. The insurance groups were some of those looking notably stronger, including Aviva which increased 15.8p to 437p.

The sector found support from Shore Capital, with its analyst Eamonn Flanagan saying that "at this early stage, we remain unconvinced that the losses from the Sendai quake will be sufficient in themselves to represent a 'market-changing' event" for the worldwide insurance market.

He expressed his surprise at RSA Insurance's weakness "given its lack of exposures" as it added 1.5p to 129.9p, and also said Beazley - 2.7p ahead at 120.7p - was one of the groups oversold.

There were words of encouragement as well from Morgan Stanley, and its analyst Maciej Wasilewicz said he believed "the market is implying a worst-case scenario level of large losses for [the] European reinsurers".

Claiming the set-up of the Japanese market – where "foreign reinsurers tend to have little or no nuclear or residential exposure, due to regulation and industry practice" – meant the sector's losses would be limited, he was especially positive on Lancashire and Amlin, which went on to jump up 36p to 568.5p and 13.3p to 398.6p respectively.

Also moving ahead were the mining stocks, including BHP Billiton which was driven up 67.5p to 2,281p. The world's largest miner was chosen by Barclays Capital as one of the "high- quality European stocks" it sees as having been hit by investors' cutting their risk, despite Japan contributing only 10 per cent of the group's revenue.

The broker picked out Whitbread as well, pointing out it "has no direct or indirect exposure to Japan unless this has a knock-on effect to the UK economy", and the Premier Inn and Costa Coffee-owner was boosted up 40p to 1,621p.

Another name highlighted was International Consolidated Airlines, and it shifted forwards 5.5p to 218.4p despite a sharp advance in the price of oil as the ongoing unrest in the Middle East and North Africa continued to worry.

Also looking good was Burberry, with the upmarket clothing retailer rising 14p to 1,108.p after losing nearly 9 per cent of its share price in the previous five sessions. H2O Market's Daniel Harris said the luxury sector had moved disproportionately lower given the fact "Japan represents 11 per cent of global luxury sales and most of the luxury groups have exposure to emerging nations, particularly China."

Yet this was enough for Deutsche Bank to downgrade its annual growth forecasts for the sector to just 2 per cent from 9 per cent, although it reduced its earnings estimates for Burberry by only 5 per cent, saying its profit from Japan "comes through license royalties which are subject to contractual minimums".

Just six groups on the blue-chip index missed out on the rally, including Legal & General which announced its final results. The insurer raised its dividend by nearly 25 per cent, yet still edged back 0.4p to 110.7p as profit-taking after a strong start to 2011 was blamed for its weakness.

On the FTSE 250, Aegis was also updating the market, and the advertising group's optimism for the year ahead and its forecast-beating revenue figures for 2010 saw it driven up 8.2p to 138.6p. There was an even bigger gain for SIG, however, which advanced 9.4p to 130.5p after the insulation compay posted a rise in its underlying annual profits of 3 per cent.

Still, it was not enough to take the mid-tier index's top spot, which went instead to Heritage Oil. The oil and gas explorer has seen a re-emergence of takeover speculation around it in recent weeks, and yesterday reports emerged that it had received – and rejected – a 425p-a-share informal bid; the news lifted it 23.8p to 313.5p.

Betfair faced some harsh words from Espirito Santo which initiated coverage on the betting exchange with a "sell" recommendation. "We do not believe that Betfair's superior technology platform on its own is enough to justify its premium rating in the sector," said the broker. Yet clearly investors were feeling more positive – perhaps because it is Cheltenham week – and the gambling group shrugged off the criticism to climb 23p to 877.5p.

There was, finally, some good news for investors in HMV as the high street chain closed 3.75p ahead at 15.25 after bullish comments from its chief executive. Claiming he was "very confident [its staff] have a long term future", Simon Fox said discussions being held with its consortium of banks have been "very positive".

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
Sport
football
Life and Style
Agretti is often compared to its relative, samphire, though is closer in taste to spinach
food + drink
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
The dress can be seen in different colours
i100
Sport
Wes Brown is sent-off
football
Voices
Lance Corporal Joshua Leakey VC
voicesBeware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Life and Style
Alexander McQueen's AW 2009/10 collection during Paris Fashion Week
fashionMeet the collaborators who helped create the late designer’s notorious spectacles
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?