Insurers are again under the cosh, even though leading shares are in general trying to push higher after yesterday's traumatic day.
Aviva - which spooked the sector with a £1.3bn loss before tax - is down another 7.2p at 182.7p. The company, currently spending millions reminding us its Norwich Union business is taking the Aviva name, sparked concerns about the capital position of the major insurers. So Prudential is off 4.75p at 216.25p, and Old Mutual has dropped 1.6p to 59.1p. Legal & General however has bucked the trend, edging up 0.6p to 27.2p.
Overall the FTSE 100 is up 4.05 points at 3533.91, despite an overnight slump on Wall Street and in Asia after the London market's own 116 point decline. The US futures are indicating a 19 rise at the open, but much will depend on the key non-farm payroll numbers early this afternoon. They are bound to be bad - but how bad could well dictate the market's tone for the rest of the day.
Andrew Turnbull, senior sales manager at spread betters ODL Markets, said:
"Yesterday's falls in the insurance and financial sector came as an unwelcome shock to many around the City. After the battering that these stocks have been given over the last year, such extreme falls yesterday were unexpected, the worry in the back of our minds now is that there seems to be very little that governments can do to halt the retreat. UK interest rates are now sitting at unprecedented levels which leaves little room for any further last minute rate cuts, quantitative easing does not seem to be working either. The feel now is that policy makers are starting to realise that buying their way out of recession is not the answer and it is time to really buckle down as recession deepens."
Building materials company Wolseley has lost 16.7p to 148.7p after details of its plans to raise just over £1bn with a deeply discounted placing and rights issue.
But Lloyds Banking Group has bounced 2p to 42.3p ahead of news of its agreement with the government over a bail out. The talks are dragging on, but it is clear the taxpayer will end up owning 60-70% of the troubling bank.
Marketing and advertising group WPP is 24p higher at 398.25p after unveiling better than expected 2008 profits and saying trading in January and February was relatively strong. Lorna Tilbian at Numis said:
"We think these strong 2008 results suggest that the group is benefiting from its variable cost base and diversified revenue streams. Whilst we think the real test will be in 2009/2010 at current levels the shares look attractive on a risk reward basis. We retain our add recommendation and our target price is raised to 440p."
