LEGAL & General was pushed higher for a second straight session yesterday, after acquisition-hungry Resolution said it was actively seeking more UK insurance businesses.
Resolution chief executive John Tiner said he believed institutional investor
s liked the idea of a consolidation play because the insurance sector had under performed expectations over economic cycles. The group is already positioning its first acquisition, Friends Provident, to be ready to merge with other UK businesses, despite taking ownership of it just a week ago.
Although Tiner said Resolution might also merge with private rivals, Legal & General remains in the spotlight. Shares rose 5 per cent on Wednesday and another 2.5 per cent to 87.95p last night. Resolution slipped 1.2 per cent to 96p.
The wider FTSE 100 continued its march upwards, although it lost some ground late in the session. After flirting with another high of more than a year, the leading index closed 9.75 points higher at 5,276.5.
British Airways was the leading riser, after it held board meetings with Spanish rival Iberia on a possible merger.
Shares in BA jumped 15p to 215p on anticipation that a deal would be approved soon.
BT hit its highest level in more than a year after upping its cost-cutting targets and saying the business could afford to increase its dividend by 5 per cent over last year. Shares, which dropped close to 70p at the end of March, rose 3.7 per cent to 147.2p yesterday.
British and Scottish Gas owner Centrica eased 0.7p to 244.3p, despite claiming its customer base was seeing its strongest growth in a decade and that it was on track to hit analyst forecasts for the full year.
Supermarkets were helped by news that Asda, which is owned by Wal-Mart, increased sales by more than 3 per cent in the third quarter. Tesco, the market leader, climbed 1.5 per cent to 425p, despite promises of a fierce Christmas price war. Sainsbury's rose 2p to 340.7p.
Other strong gainers included: Inmarsat up 41p to 651p; Whitbread up 50p to 1,300p and Wolseley up 51p to 1,365p.
Amec, the energy services firm, was the biggest faller in the FTSE 100. It said that while recent trading had been in line with expectations, its order book had shrunk. Shares dropped 43.5p to 822.5p.
Tullow Oil, Britain's largest oil explorer, was the heaviest faller in a sector hit by falling crude prices. The Africa-focused group slipped 22p to 1277p.
Elsewhere, mid-cap oil explorer Dana Petroleum dropped by more than 4 per cent on reports that a well in Norway found less oil than expected.
The Aberdeen-based company said further assessment of the Jetta well would be required to determine whether the discovery was commercially viable. Shares in the group closed 53p lower at 1,204p.
Country Life butter firm Dairy Crest dropped 16.2p to 391.8p as it reported a 9 per cent lift in interim profits but a 1 per cent fall in sales, despite strong performances from its five key brands.
Scottish rival Robert Wiseman, which reports interim results on Monday, dropped in sympathy, closing 8.6p lower at 460p.
On the Aim, Leuchars headquartered security firm Croma continued its strong rise of recent days, as it announced two three-year contracts worth a combined £1.8 million.
Croma announced a maiden pre-tax profit for the year to 30 June on Monday. Shares rose 7.1 per cent to 1.88p yesterday, with the stock now having risen 25 per cent this week.
