Prudential falls, tracking sector on Wall Street

22nd Sep 2011 10:56

Life insurer Prudential is being hit hard this morning. Interestingly, Reuters cites traders at ETX Capital as linking that fall to those seen last night amongst insurers on Wall Street. According to them, "Operation Twist" could threaten the earnings of some of the country's largest insurers for years to come," apparently due to their heavy exposure to US bonds. As a whole the full-line insurance sector fell back by 6.74% yesterday in New York trading, the fourth largest drop. Possibly adding to the selling pressure, news this morning that analysts at Investec have trimmed their target prices on insurers by approximately 10%, although they do describe Aviva and Resolution as having "great" and "safe" yields. As well, and possibly linked to the above, Investec describes some insurers' exposure to PIIGS bonds as being modest.Investec has lowered its target on Prudential to 698p from 711p. As of 10:54AM shares of Prudential are falling 5.93% to the 555p mark in London trading. AB