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Stronger insurers, miners push FTSE to 1-month high
October 18, 2013 / 8:18 AM / 4 years ago

Stronger insurers, miners push FTSE to 1-month high

* FTSE 100 index rises 0.3 percent

* Insurers up on expectations of EU capital rules deal

* Chinese growth data helps mining sector

By Atul Prakash

LONDON, Oct 18 (Reuters) - Britain’s top share index hit a one-month high on Friday, with insurers gaining on the news that the European Union is close to finalising a deal on insurance capital rules and Asia-based AIA Group reporting new business.

The mining sector also advanced after data from China, the world’s second largest economy and its biggest metals consumer, showed the economy grew 7.8 percent in the third quarter, its quickest pace this year.

British insurer Prudential rose 3.4 percent, the top gainer on the blue-chip FTSE 100 index, which was up 19.98 points, or 0.3 percent, at 6,596.14 by 0858 GMT. The index, up for a seventh straight session, rose to a one-month high of 6,611.94 earlier in the session.

Prudential added the most points to the FTSE 100 index, while other British insurers were also in demand. Legal and General gained 0.7 percent and Aviva rose 0.4 percent on the positive sector news.

Sharon Bowles, the British Liberal Democrat chairwoman of the European Parliament’s economic affairs committee, told Reuters late on Thursday that a deal on how insurers will hold enough capital to keep policyholders safe will severely water down the version sought by industry regulators.

“Clearly a deal for the industry reduces uncertainty. Talk that the deal will be less prohibitive than once thought is also positive,” said Keith Bowman, an analyst at Hargreaves Lansdown.

Traders said British insurers were also supported by news that AIA Group, the world’s fourth-largest insurer by market capitalisation, saw the value of its new business rising by 26 percent in the third quarter.

“We like the insurance sector because of its strong earnings momentum and low valuation,” said Robert Parkes, an equity strategist at HSBC Securities.

Among other sectors, UK miners rose 0.6 percent on positive Chinese growth data, with BHP Billiton rising 1 percent and Rio Tinto gaining 0.6 percent.

“I suspect that the data, albeit one must always take it with a pinch of salt, could prove supportive to the miners in the near-term,” said Jeremy Batstone-Carr, head of private client research at Charles Stanley.

“China is not out of the woods yet but for now all looks fine.” (Editing by Gareth Jones)

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