WEDNESDAY MARKET CLOSE: Insurer’s ‘profit warning’ hits sector

Insurers Admiral and Aviva were the latest stocks to drag the wider market lower following disappointing updates on their performance.

The wider FTSE 100 suffered its third consecutive day of marked falls. Picture: PA

Jasper Lawler, market analyst at CMC, said: “Admiral is down after reporting a drop in revenues in the first half and forecasting no imminent increase in car insurance premiums. The decline was exacerbated by the company’s need to raise capital through a bond issue.

“An update from fellow insurer Aviva also wasn’t taken too well as investors weren’t confident in the company’s turnaround plan.”

Aviva boss Mark Wilson announced plans for a doubling of the amount of cash available to the business while cutting operating costs. The firm hopes to achieve these targets by the end of 2016.

Its shares were down 18.6p at 493.9p, while Admiral dropped 52p to 1,522p after what Shore Capital analyst Eamonn Flanagan called “a warning on profit for 2015”.

Another faller was pub chain JD Wetherspoon after a trading update prompted brokers at Shore Capital to trim their 2014 profit forecast by £500,000 due to margin concerns. The stock slipped 15p to 745p.

The wider FTSE 100 suffered its third consecutive day of marked falls, amid nerves ahead of a US reporting season that will show how far global firms have been able to grow profits on the back of the economic upturn. The index was down 20.41 points at 6,718.04, although it had been lower still for much of the session.

Airline stocks were back in favour, bouncing after a slump in the previous session sparked by a profits warning from Air France-KLM. British Airways-owner International Airlines Group gained 4.1p to 340p, while EasyJet topped the risers’ board with a lift of 39p to 1,287p.