London - Life insurers helped Britain's FTSE 100 edge higher on Wednesday after a contract win by Legal & General and Standard Life's move to expand its funds business with an acquisition.
Shares in Standard Life rose 5 percent to the top the of the FTSE, as the company said it was acquiring Ignis Asset Management. It expects the deal to boost its earnings and help it cut costs over the next three years.
Life insurance and pensions provider Legal & General Group rose 2.8 percent on the strength of a 3 billion-pound ($5 billion) bulk annuity contract with the ICI Pension Fund.
Despite the bounce, L&G's stock is still down roughly 6 percent since last Wednesday, when the UK government said it would scrap a system that made it compulsory for most retirees to buy an annuity. Standard Life has more than recouped the losses suffered after the announcement.
“The newsflow and momentum for the stocks is certainly on the up,” said Manoj Ladwa, head of trading at TJM Partners, adding he was especially bullish on Standard Life.
“There's more consolidation to come with the Standard Life deal being announced, which seems a bolt-on acquisition.”
The two stocks helped the FTSE 100 rise 0.3 percent to 6,624.91 points.
The index has been rebounding over the past week, but the upside looks limited after the FTSE failed to get past its most recent top, around 6,865, earlier this year.
“The move higher should end around (last week's high at) 6,628 but no higher than (an early March's low of) 6,672,” said Anders Söderberg, chief technical analyst at SEB Bank.
“My view is that we are in a top formation and I would like to see the index coming down to the low 6,000s.”
Curbing gains on the index was Lloyds Banking Group , which fell 4 percent after the British government sold 5.6 billion shares in the bank at a 4.6 percent discount to Tuesday's closing price.
The deal cuts the state's stake in the firm to less than 25 percent and puts it on course for a complete exit in the next year, at a profit. - Reuters