The FTSE 100 has steadied after setting a fresh 14-year high, dragged down by Old Mutual and Aviva after the insurers issued results for the first three months of the year.
The FTSE 100 shed 11 points, or 0.2%, to 6,867 with Old Mutual and Aviva among the largest fallers, dropping 2.2% and 1.6% to 204.8p and 522.8p respectively. Earlier the UK blue-chip index had reached 6,895, the highest level since December 1999. It marks the second time the index has notched up a 14-year high this week.
Traders took profits on Old Mutual (OML) after the insurer posted a 24% rise in sales for the first quarter of the year. Shares in Old Mutual hit near a 12- month high last week.
Old Mutual chief executive Jim Roberts said on a conference call that the group expected its UK business to benefit from Budget changes to pensions that will remove the need for many to buy an annuity and relax rules around pension drawdown.
‘We expect to be a net beneficiary from the radical changes to the UK pensions system,’ he said. ‘We have no exposure to annuities but are a leading provider of pension income drawdown.’
It was a different story for Aviva (AV), where a drop in annuity sales led to a 22% decline in UK new business over the quarter, while harsh weather in Canada led to a rash of claims for its general insurance business, offsetting positive results elsewhere.
‘Aviva has reported a solid first quarter trading statement showing the benefit of a diversified portfolio in the face of weather losses and regulatory change,’ said Barrie Cornes, analyst at Panmure Gordon. ‘There remains much to do but Aviva is in a strong position and getting better.'
Land Securities (LAND) was another faller, shedding 29p, or 2.6p to £10.76 as full-year 2014 results for the real estate investment trust prompted a mixed response from investors. A 12.2% jump in net asset value was ahead of consensus expectations, but some analysts saw the results as disappointing.
The London Stock Exchange (LSE) was amongst the big risers, jumping 46p, or 2.6%, to 859p after reporting a 42% increase in pre-tax profits.
Meanwhile, hopes that the economic recovery in Europe had gained momentum were dealt a blow after new figures showed growth in the eurozone stood at just 0.2% in the first three months of the year. The euro fell 0.4% to $1.3658 on the news.