With financial shares lifted by hopes of a positive response to the US toxic asset plan due to be unveiled early this afternoon, Prudential has also been boosted by a positive analyst note.
Pru shares are now 8.25p at 341p after Deutsche Bank raised its recommendation from hold to buy, although the bank cut its target price from 500p to 430p to reflect the general weakness in the market. Deutsche said:
"Prudential has one of the most attractive long-term franchises of any European insurer, in our view, and we believe its position relative to peers is improving. Balance sheet fears have overshadowed the stock; however, in the light of better free surplus generation and proactive management, we believe that no forced capital-raising will be required."
Still with financials, Legal and General is now up 2.3p at 45.1p ahead of results this Wednesday, while Barclays is 8.7p better at 113.7p.
Miners are also on the move, with metal prices moving higher on demand hopes. Rio Tinto has risen 143p to £21.71, despite continuing concerns about its $19.5bn investment deal with Chinalco. Vedanta Resources has added 36.5p to 673.5p, while erstwhile Rio suitor BHP Billiton is 35p better at £14.81 despite Credit Suisse downgrading the company to underperform from neutral.
Overall the FTSE 100 is holding on to much of its early gains ahead of the details of the US bailout. The leading index is now up 65.54 points at 3908.39.
(As an aside, here is a lighthearted but valid explanation of how the global financial system got into this mess, courtesy of the You're Having a Laugh blog.)
Elsewhere Homeserve - the emergency cover and repair company - has climbed 102p to £10.37 after UBS moved from sell to buy and raised its price target from 940p to £12.25. UBS said:
"The market remains sceptical that HomeServe can deliver its stated March 2009 target of 1.6m gross policy wins and a stable churn rate of 17% for the UK membership business. We are becoming increasingly confident that the company will deliver on its UK promises, and with delivery, we see upside pressures for the shares. Furthermore, we remain positive on international development.
"Since 2002, HomeServe has tried to build up an Emergency Repair (ER) business. At best, its record can be described as problematic, characterised byintegration issues, margin issues and unpredictability. Nevertheless, HomeServe has just undertaken a restructuring exercise to transfer core ER activities into the policy division.
"We think the rump of the ER business is no longer strategic and would not be surprised if it were disposed of during the next few years. Indeed, as long as the rump is not a drag on the group,we no longer see the ER business as amaterial value driver for the shares."
