Like many sectors, insurers have been volatile lately on worries about their capital positions. But Standard Life is moving higher in early trading after better than expected results.
Full year profits rose 6% to £933m and it indicated its capital surplus had held up well despite the current market turmoil. Its shares have climbed 6.2p to 167.5p as a consequence. Panmure Gordon issued a buy note, saying:
"Standard Life has reported solid operating profit some 5% ahead of expectations. The full year dividend has increased to 11.77p per share producing an historic yield of 7.3%, and the financial strength of the company remains robust with the surplus at £3.3bn (2007: £3.4bn). Standard Life represents a relatively defensive play within the UK life sector and, given both the 43% discount to 2008 embedded value (286p a share) and the current market uncertainties, we maintain our buy recommendation and 295p target price."
But Aviva fell 20.7p to 192.8p as Citigroup cut its rating on the company from hold to sell and slashed its price target from 450p to 160p.
Elsewhere the market has dipped back again on continuing concerns about the global economy, with Asian shares lower overnight - the Nikkei 225 lost 2.4% - and weak retail and industrial figures from China. Later today come weekly jobless and retail sales figures from the US. At the moment the FTSE 100 is down 42.94 points at 3650.87. Chris Hossain, senior sales manager at spread betters ODL Securities said:
"The markets appear to have taken a breather, but one can't help but feel that this is the lull before another storm. The bulls may have won the battle over the past few sessions, but it is clearly the bears that are winning the war. It's now with bated breathe we wait to see which way markets will move towards the latter end of the week. It feels as if the markets are trying to form a base, but there isn't sufficient belief to see a fully fledged recovery. Understandably, we have seen many "bases" over the past 18 months, so maybe it is justified to stay on the sidelines until we see some multi-day momentum."
Miners are lower on - yet again - worries about demand from China, with Antofagasta off 32p at 503.5p after Royal Bank of Scotland analysts downgraded from hold to sell, while BHP Billiton is down 52p at £12.78. Rio Tinto is 56p lower at £20.28 as Australia's parliament defeated a motion designed to scupper the proposed $19.5bn investment by Chinalco in the company.
On the way up was Morrisons, 1.25p higher at 247p after a good set of results. But Argos and Homebase owner Home Retail lost 8.8p to 195.2p after reporting continuing declines in sales and profit margins and warning of an extremely challenging time ahead. Singer Capital Markets said:
"Homebase remains an area of major concern as conditions get more challenging and as it loses share to the other sheds, in particular to a recovering B&Q."
