FTSE financial stocks recover
Battered financial stocks HBOS and Aviva recovered ground today as the FTSE 100 Index consolidated gains seen over the past two sessions.
Sentiment was helped by a strong performance on Wall Street last night and reassuring comments from insurer Prudential.
The FTSE 100 Index, which rose by more than 5% on Monday, was 38.9 points higher at 4321.6 by mid-morning.
Much of the City’s attention was focused on the Pru after it said it was strong enough to withstand much heavier downturns in stock markets.
Pru shares have fallen by a third in the past month because of the market fears, but any hope of a rebound was dashed today after it failed to provide any meaningful update on plans to buy the Asian arm of AIG. It also said it was unlikely to meet its Asian sales target a year ahead of schedule.
Shares opened in negative territory and were later 5.5p higher at 335.75p, a gain of 1%. Pru’s rival Aviva benefited from the reassuring comments, with its shares up 11% or 34.75p to 341.25p.
Halifax Bank of Scotland rose 14% or 11.2p to 90.1p after Standard Life said it was willing to increase its stakes in HBOS and Royal Bank of Scotland. RBS moved in the opposite direction, down 4.5p at 80p.
There was also a 10% gain for building supplies firm Wolseley after Numis Securities said the shares offered value at their current level. The beleaguered stock rose 31p to 330.75p.
Housebuilders were also back in favour after heavy falls yesterday. Taylor Wimpey led the way with a gain of 2.5p to 13p while Persimmon added 48.5p to 249.25p.
Elsewhere in the FTSE 250 Index, a dividend cut and 4.2% like-for-like sales drop failed to prevent Debenhams shares from rising 5% or 1.5p to 34p. Investors were encouraged by a pledge to reduce the company’s £1bn (€1.28bn) debt.
