Asset managers and insurance companies, considered by many as boring and steady companies, led gains today as investors dumped shares of investment banks, once the most glamourous players of financial markets.
Shares in Barclays Bank, which drives most of its income from its BarCap investment banking unit, fell almost 3%, or 10p, to 329.6p at 9.43am. The lender said its second quarter investment banking income fell 15% £3.28bn, compared with the same period one year ago. Overall, Barclays posted a 44% increase in half-year pre-tax profit to £3.95bn, above analyst forecasts of £3.4bn.
Investment banks, such as Goldman Sachs or JPMorgan, suffered from lower trading and plunging credit and equity markets in the midst of the European sovereign debt crisis in May and June. Turbulent markets withdrew investors, who seeked traditional safer assets, such as gold and bonds.
Asset managers, whose income is less volatile than that of investment banks, rose. Schroders added 3.9%, or 53p, to £13.91, after beating analyst forecasts in its first-half earnings. Man Group, the world's largest publicly traded hedge fund, gained 5.2p, or 2.3%, to 230p.
Aviva led gainers with a 5.6% jump, or 20.5p, to 388.5p, after saying its half-year profit rose 21% to £1.27bn. The British insurer said it was confident about its future prospects.
The FTSE-100 Index was practically unchanged, down 2.4 points at 5,384.
