MARKET REPORT

LONDON’S top-flight index continued to climb yesterday, brushing aside a significant slump from Standard Life Aberdeen after Lloyds Banking Group called time on a £100bn contract.

The FTSE 100 Index closed up 20.84 points at 7,234.81, as global indexes regained their poise following last week’s turbulence when interest rate fears sent equity markets into meltdown.

Despite the brighter performance, Standard Life Aberdeen was rooted in the red, dropping more than 7%, or 29.3p to 360p.

Aberdeen took on the deal to manage the £109bn of assets when it bought Scottish Life Investment Partnership from Lloyds in 2014.

But there was a clause allowing Lloyds to end the mandate if Aberdeen merged with a competitor - and this was triggered by last summer’s £11bn tie-up between Standard Life and Aberdeen Asset Management, creating Europe’s second-biggest fund manager.

Laith Khalaf, Hargreaves Lansdown senior analyst, said: “This is a blow for Standard Life Aberdeen, but has been on the cards ever since the merger. Standard Life and Scottish Widows are long-standing rivals, and the prospect of one group managing the fund range of the other was never going to sit entirely comfortably in the corridors of power in Edinburgh.

“Losing this book of business would strike a sour note for the Standard Life Aberdeen merger, and undermines some of the rationale for joining forces, which was built on scale. However, while almost a fifth of Standard Life Aberdeen’s assets look like they might be walking out the door, this only equates to 5% of revenues, as these investment services are relatively low margin.”

The biggest risers on the FTSE 100 Index were Fresnillo up 61.5p to 1,391p, Johnson Matthey up 102p to 3,206p, BAE Systems up 18.8p to 591.2p, Old Mutual up 7.3p to 246.7p.

The biggest fallers were Standard Life Aberdeen down 29.3p to 360p, AstraZeneca down 116.5p to 4,713.5p, Royal Dutch Shell B down 40.5p to 2,279p, DCC down 110p to 6,690p.