Market Report: Insurers on the up following well-received results

Insurers bucked the negative wider market sentiment after a welter of well-received results.

RSA was a strong gainer, up 9.3p at 427p. Led by the former Royal Bank of Scotland chief Stephen Hester, it managed to overcome currency headwinds to boost operating profits, helped by planned disposals.

Aviva benefited from a strong first-quarter performance in the UK, which propelled the shares 13.5p higher to 527p, while L&G reported growing assets and premiums, and added 2.9p to 262p. “We continue to believe that L&G will emerge as a winner in the rapidly reshaping UK life market,” said analysts at Berenberg.

The FTSE 100 index of leading shares was in a subdued mood on election day, as investors tried to gauge the political compromises that are likely to emerge. “The gap in policy between the manifestos of the two main parties is as great as it has been for decades,” said Peter Cameron of Ecclesiastical Investment Management. “Perhaps not since Thatcher v Foot have we seen such a difference.... Throw in a larger than ever share of the vote for the smaller parties and this election has the potential to trigger all manner of unpredictable market reactions.”

Telecity was boosted on news that the Nasdaq-listed data centre group Equinix has made a 1,145p-per-share cash and equity bid for its rival, valuing it at around £2.3bn. This latest offer comes after Telecity entered non-binding talks with Interxion, a European data centre provider, last February. “The Equinix bid looks fully priced and we view there as being only an outside chance of a counterbid from another player or from private equity,” said Investec’s Roger Phillips.

At the same time, Telecity issued first-quarter results and reiterated its guidance for the full year, as demand for its computer warehouses from clients like Spotify and YouTube continues to accelerate. The shares jumped by 195.5p to 1,095p.

“The cash/shares split and announcement timing suggests to us that this bid is highly likely to come to fruition,” said David Toms of Numis, who rates the stock a “hold”.