AIN’S top share index retreated yesterday, having flirted with the 6,000 level due to a more promising global economic outlook and robust earnings, with heavily weighted miners hit by concerns over Chinese demand.
After five successive days of gains, the longest winning streak since last summer, the FTSE 100 ended down 10.48 points, or 0.2 per cent, at 5,945.43, after an intra-day peak of 5,989.07.
Miners were responsible for taking the index into the red with 11.2 points of downside, as they tracked copper prices lower on uncertainty about the outlook for demand from top consumer China, which has tempered its economic growth expectations.
Insurers fared well, led higher by a 7.2 per cent jump in Legal & General, the top UK blue-chip riser, after it unveiled forecast-busting full-year profits and hiked its dividend by more than a third.
“L&G has reported a very good set of FY results this morning with higher than expected cash and dividend the main highlights,” BofA Merrill Lynch said, repeating its “buy” rating.
Merrill said L&G shares had performed well so far this year, up around 20 per cent, and it expected the stock’s re-rating to continue.
Peer Prudential, which posted solid earnings on Tuesday, rose 2.9 per cent.
Neil Dwane of Allianz Global Investors argued that UK equities, with a current price/earnings ratio of around 11 times and a yield of nearly four per cent, remain attractively valued.
“With monetary easing in the UK and globally showing no signs of abating and investors still hunting for income, equities become, even after the rise of the last three years, a safer and safer place to invest,” he said.