LONDON (ShareCast) - London’s leading index remains volatile, although continuing strength among the life insurers and expectations of gains in the US now outweigh losses across the real estate sector.

Life insurers Friends Provident and Resolution said they are in advanced discussions regarding a possible merger of the two businesses. The merger, if agreed, would involve an all-share combination of the two groups. Friends shareholders would own 49.1% of the merged company. Resolution shareholders would own 50.9% of the merged company.

Other life groups shot ahead in sympathy. Legal & General, Aviva, Prudential and F&C Asset Management, which is majority owned by Friends Provident, all improved.

Barclays is also busy. It has raised its offer for ABN to €67.5bn, consisting of €42.7bn in shares and €24.8bn in cash. In addition, two Far East groups, China Development Bank and Singapore's Temasek are to invest €13.4bn into Barclays to help finance the revised offer for ABN Amro, of which €9.8bn depends on completion of the deal.

Meanwhile, oil plays are better despite a dip in crude prices towards $75 a barrel. Royal Dutch Shell, BG and BP are higher.

Property groups are under pressure again on financing concerns. British Land, Segro and Land Securities are all in the red.

A Merrill Lynch downgrade has also hit Johnson Matthey, with the platinum group cut to 'neutral' from 'buy' as the shares are trading close to its price target of 1,850p.

Miner Lonmin has been dropped to 'underweight' from ‘neutral’ by Morgan Stanley, with the price target lowered to 3,650p from 4,000p.

Data retrieval software specialist Autonomy lifted first half pre-tax profits 89% to a record $47m, on sales up 18% at $138.7m. The group says growth prospects are good throughout the rest of 2007 and into 2008.

Spread better IG Group also had a good year and continues to benefit from market volatility, with the firm reporting a new record level of monthly revenue in June alongside a 35% hike in full year pre-tax profit.

Recruitment group Berkeley Scott has confirmed that it is in advanced discussions with Quantica that may lead to a recommended cash offer being made for its larger rival. It said the talks have been going on for several weeks, with any offer likely to be all in cash and at a price of no more than 50p.

SThree lifted profits by 32% in the first half, the recruitment group said today, with the potential of the US business possibly much greater than initially expected.

Home delivery pizza chain Domino's Pizza said Monday it is well-placed to exceed market expectations for the year as interim profits came in 35% higher than last year.

Marketing software and service group SmartFocus has seen a substantial increase in first half revenue and profit, adding that it is confident of sustained growth in 2007.

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