Market Report: Prudential catches a cold from its US exposure

The blue-chip index may have reached its highest point since June 2008 yesterday, but Prudential was left behind as analysts urged caution over its exposure to the US.

Downgrading its advice on the insurer to "reduce", Nomura said that although "conventional wisdom sees Prudential's main attraction as its Asian growth potential... we think the market is underestimating the recent growth in its US exposure".

That should worry investors, said the broker, which predicted Prudential will go "ex-growth" in the States this year thanks to increased competition "and the possibility that aggressive accounting has overstated profitability".

Nomura's analysts also said that its Asian unit "looks to be fully valued", and added that it preferred the insurer AIA for exposure to the region, which Prudential attempted to buy last year.

It was not all bad – the broker upped its estimates for the group's 2010 earnings – but Prudential still hit a low of 680p during trading before a slight rally meant it finished 1.5p weaker at 688.5p.

Overall the market was in a positive mood as the FTSE 100 surged up 70.73 points to 6,056.43 after three sessions of falling, with the banks helped by hopes that an agreement on a new eurozone rescue plan is getting close.

A number of blue-chip companies released figures yesterday, with Burberry the star of the show. The upmarket clothing retailer took pole position after rising 56p to 1,115p, following its third-quarter update in which it revealed forecast-beating revenue.

Investec's analysts were among the company's fans, saying that they "continue to believe the shares deserve a premium as they offer one of the few convincing global growth stories within our universe".

SABMiller jumped up 37p to 2,209p thanks to its interim management statement, as the brewer said it reported a 3 per cent increase in beer volumes in the third-quarter. There was a less positive reaction to Experian's latest figures, however, yet it was still 3.5p stronger at 779p as it announced a return to "positive growth across all regions and principal activities".

With the miners benefiting from strong metal prices, both Rio Tinto and African Barrick Gold (ABG) revealed latest production numbers. Rio climbed up 65.5p to 4,450p after its iron-ore output rose to a record level, but ABG shed 4p to 560p thanks to a failure to reach its 2010 production target.

Arm Holdings was bumped up 22p to 536.5p, meaning it has now gained more than 25 per cent already this year. Frequently the subject of takeover speculation, it announced a new deal with IBM late on Monday, while Goldman Sachs yesterday gave it a "buy" rating and a target price of 700p.

There was a modest shift up for Pearson of 5p to 1,006p following the news that it is upping its stake in the online education company TutorVista. The $127m (£80m) deal means that the publisher – which releases a trading update today – is now in control of the Indian group, increasing its exposure to the country's market.

The clear winner on the FTSE 250 was Taylor Wimpey as it leaped forwards 2.95p to 38.1p. The housebuilder said in a trading statement that its profit for 2010 would be ahead of expectations thanks to an improvement in the North American markets.

The group also confirmed it has received interest in its US unit Taylor Morrison, and although it said there was no guarantee of a sale, it reiterated its goal of refocusing "the business of the group on the UK market in the medium term".

A profit warning in IG's interim results left it with the mid-tier index's wooden spoon and a drop of 37.5p to 481p, with the spreadbetter blaming low trading activity last month for its caution over meeting expectations.

De La Rue climbed 41p to 829p as it continued to benefit from speculation this week that a new bid for the banknote printer could be just around the corner. The French group Oberthur Technologies has been given a deadline of 7 February to improve its 905p-a-share indicative offer, which was made and rejected in December.

One takeover definitely not happening is Ashtead's joint move for Lavendon, made with the Belgian group TVH Services. The small-cap company last week rejected a 115p-a-share approach from the duo, and Ashtead yesterday announced it was pulling out. As a result it gained 11.1p to 170.3p, while investors left Lavendon 12p weaker at 97.25p.

Down among the small-cap companies, there was vague speculation from market gossips that Southern Cross is about to receive an approach from a US group worth 45p-a-share, and the care home company stormed up 3.75p to 24p.

On the Alternative Investment Market, trading in Regal Petroleum's shares was suspended after it revealed it had received a new approach. The oil group's shareholders are currently considering a £77m offer from Energees Investments, but Regal announced that a joint proposal has been made by Heamoor and Geo-Alliance.

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones