Leading shares have recovered some ground after their falls at the end of last week, after inital disappointment with the Euroepean Central Bank’s latest stimulus measures.
Comments from ECB president Mario Draghi over the weekend seem to have been taken more positively, as he reassured investors that the central bank would take whatever measures were necessary to support the eurozone economy.
Meanwhile better than expected US jobs data on Friday, while reinforcing the view that the Federal Reserve will raise US rates this month, also provided some comfort about the state of the world’s second largest economy.
Insurers are among the gainers after the Bank of England gave the green light to 19 institutions on their internal models on solvency levels.
Prudential has put on 24.5p to £15.30 as it said it would be the first insurer to update on its capital position under new EU solvency rules. It plans an update on 19 January, while others will issue statements alongside annual results a month or so later. The optimism in the sector has lifted Legal & General by 3p to 270.3p and Aviva 6p to 513.5p. Eamonn Flanagan at Shore Capital said:
At that stage, all focus is likely to be on the actual headroom, the coverage ratios and the expected implications, if any, on dividend policies. No doubt, we will have an increasing level of commentary on the companies as the respective announcement dates approach…our view remains, that any dividend policies that have been elucidated to date, think Legal & General, will remain intact (bearing in mind the various speeches made on the subject by the PRA in recent months).
Elsewhere ITV has added 5.2p to 273.1p after the Guardian reported an expected bumper advertising spend for broadcasters over Christmas. In a buy note Ian Whittaker at Liberum said:
ITV said it expected December ad spend to be up 4% at its interim management statement last month so - at least - they should meet that target and probably exceed it.
Overall the FTSE 100 is currently up 45.59 points at 6283.88.
But with Opec deciding not to cut oil production, crude is under pressure again, with Brent down 0.8% at $42.63 a barrel. So Royal Dutch Shell B shares are leading the FTSE 100 fallers, down 28.5p at £15.71 while BP is close behind, 6.05p lower at 353.65.
BG, which Shell is in the throes of buying, has fallen 7p to £10.18. Tony Cross, market analyst at Trustnet Direct, said:
The idea of $20 oil is being tabled once again and this could well see those questions being repeated as to exact value that sits in the BG Group acquisition.
Outsourcing group Serco has slid nearly 8% to 105.6p after it warned on 2016 revenues and profits, due to the sale of an offshore call centre business and the loss of a number of contracts.
