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Former black sheep Aviva and BP lead FTSE
by Chris Marshall on Oct 03, 2013 at 09:50
Aviva (AV.L), the cost-cutting insurance company that so disappointed investors earlier this year when it slashed its dividend, found investor favour on Thursday morning after announcing the sale of its US business at a bumper price.
Shares in the company, which have recovered steadily since April, rose 3.1% to 420p, leading the FTSE 100 higher. The sale of Aviva USA to Athene Holding bagged $0.8 billion more than expected, at $2.6 billion (£1.7 billion).
Another former pariah for UK investors was also attracting buyers. BP (BP.L) rose 1% to 437p after the oil company received good news from a US appeals court that will potentially save it billions of dollars in compensation payments it has to make over the 2010 Gulf of Mexico disaster.
Easyjet (EZJ.L) was in favour after the airline upped its pre-tax profit expectations for the year to £470-480 million. Shares moved 1.2% higher to £13.30
‘We believe that the long-term prospects for this business remain exciting,’ commented Panmure Gordon analyst Gert Zonneveld, who rates the shares a ‘buy’. ‘The company has a strong structural cost advantage over most of its competitors, creating a highly attractive value proposition.
The wider FTSE 100 was struggling to hold onto gains made in early trading, up 0.1% to 6,447, roughly in line with other weak moves higher across Europe.
The US political stalemate and continuing government shutdown capped enthusiasm. Wall Street had moved lower after a clear warning from US president Barack Obama that investors ‘should be concerned’.
See the full video here: Obama tells Wall Street 'you should be concerned'
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