London - UK shares extended their falls on Wednesday on uncertainty over the earnings season, led lower by UK car insurer Admiral after a downbeat trading update.
Admiral sank 5.4 percent, top FTSE 100 faller by some margin in brisk trade, after it said revenues fell in the first half of the year and there was no firm evidence of a return to growth in UK car insurance premiums.
The company said it planned to launch its first ever bond offering, of up to 200 million pounds ($340.3 million), to diversify its capital base and help it prepare to meet Solvency II regulations in 2016.
Oriel Securities repeated its “sell” rating on the stock.
“The business is dependent on a turn in the cycle to maintain profitability which we view as being further away,” it said.
Trading volume in Admiral was robust, already at its 90-day daily average after around an hour's trade.
Aviva was another big casualty, off 2.5 percent, as traders adopted a cautious approach as the UK insurer held a presentation for analysts and investors.
Trading volume in Aviva was also strong, at around two thirds of its average volume against the broader FTSE 100 on a tenth.
The UK benchmark was down 23.64 points, or 0.4 percent, at 6,714.81 points by 10:30 SA time, having suffered its biggest one-day percentage fall since March on Tuesday - down 1.3 percent.
“It feels like there's really negative sentiment; people are worried about earnings... I think we'll see a couple of days of selling,” Joe Rundle, head of trading at ETX Capital, said.
Airlines, which slid in the previous session following a profit warning from Air France-KLM, recovered some of their poise as traders deemed the weakness to be overdone.
EasyJet climbed 2.1 percent to top the FTSE 100 leader board, while British Airways owner International Consolidated Airlines Group rose 0.4 percent.
While there were glimmers of hope for earnings, with US aluminium company Alcoa having kicked off the latest reporting season with quarterly results that beat analysts' expectations, investors were doubtful they will be enough to give a big fillip to the FTSE, hovering around multi-year highs.
“There's been increasing caution ahead of the earnings season... It needs to be a fairly strong season... for indexes to maintain their current strength,” Richard Hunter, head of equities at Hargreaves Lansdown, said.
Also weighing on the FTSE 100 were stocks trading without the attraction of their latest dividend, namely Coca-Cola HBC AG and Next. They knocked 1.06 points off the index. - Reuters