Financial Stocks in Demand

The FTSE 100 index closed with a modest gain of 20.15 points or 0.4% at 5,131.99 on Tuesday after a volatile session which saw the leading share index as high as 5,181.21 in the morning and as low as 5,105.30 in the afternoon.

Dominic Turner
shareprices.com - Wednesday, February 10, 2010

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Financial stocks led the way after speculation that the other countries in the eurozone are planning a bail-out package for their beleaguered neighbour Greece. The Governor of the Bank of England, Mervyn King, was also making encouraging noises about the fiscal situation in Britain compared with that in Greece. According to the Business Week website, he told a press conference in London, "I don't think you can compare the UK to Greece. There are big differences. We have our own currency. There's a clear political consensus to take action to deal with the fiscal position. We have a very good track record."

Broker Goldman Sachs upgraded its rating for interdealer broker ICAP to "buy" from "neutral", at the same time cutting its target price to 390p to 480p. Investors responded kindly to the news and ICAP's share price emerged from a spell in the doldrums, closing up 32.2p or 10.56% at 337p. There was also speculation in the insurance sector that Prudential and Resolution were preparing a bid for the largest insurance group in Britain, Aviva. Prudential closed up 21.5p or 3.84% at 581.5p, whilst Resolution closed down 1p or 1.33% at 74p. Unsurprisingly, perhaps, Aviva fared best of the companies involved in the bid speculation, closing up 17.1p or 4.96% at 361.60p.

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