Lord Rothschild's RIT Capital lifts equities exposure The FTSE 100 reached a new five-year high and edged up 11.52 points to 6,439.16, while the mid-cap FTSE 250 gained 30.08 to 13,953.35 Aviva acted as a weight on the main board, after investors" fears of a dividend cut came to pass. The insurer slashed its final payout by 44pc to 9p, sending the shares tumbling 45 to 314.8p. But worries temporary power provider Aggreko would deliver more bad news at its full-year results, in the wake of two profit warnings, proved unfounded. The company posted an 11pc rise in 2012 pre-tax profits, before exceptional items, to £365m, and unveiled a 15pc increase in its total dividend. That spurred Aggreko to the single biggest gain on the FTSE 100, closing up 181p at £19.39 There were doubts, however, over the sustainability of dividend payments among the water utilities, with the experts at Credit Suisse forecasting that both Severn Trent and United Utilities may need to reduce their payouts by about 20pc in 2015. "UK water stocks are trading at peak valuations despite a fast-approaching regulatory review," they said. We believe the market is overlooking the fact that allowed returns and earnings are likely to come down materially. United Utilities fell 16 to 726p as the analysts reiterated their view that the company remained their least favourite share in the sector, but Severn Trent added 18p to £16.24 on an upgrade to "neutral" from "underperform." The Credit Suisse experts said the company had the "least to lose" from impending regulatory changes. The more immediate prospect of bumper rewards for shareholders helped others. Mid-capper Spirax-Sarco Engineering climbed 127p to £26.30, a fresh high, on news of a 100p special dividend, which Liberum Capital analyst Ben Bourne described as a "reminder of the group's quality." Back on the main board, the announcement of a £175m share buyback by fellow engineer IMI also pleased investors, who chased the shares 57p higher to £13.19. HSBC analysts did WM Morrison no favours by cutting their recommendation on the supermarket group to "underweight" from "neutral" ahead of its 2012 results on Thursday . They said profits were not expected to grow between 2013 and 2015 and argued that Morrison risks ignoring its core customer base, who are "value oriented," by focusing on its fresh food offering. Investors decided to put Morrison shares back on the shelf, and they slipped 4.2 to 259p. On the FTSE 250 the move by activist hedge fund Elliott Advisors to sell half of its almost 20pc holding in transport group National Express, announced after the close on Wednesday, inevitably hit the stock, which slumped 25½ - or 11pc - to 204½p. Nevertheless, Deutsche Bank analyst Anand Date was unperturbed by the disposal, totalling some 50.6m shares priced at 210p apiece, a 9pc discount to Wednesday's close. He argued it did not indicate "any fundamental problem" with the company. "We think this investment has not been as successful as Elliott would have wished," Mr Date said. Since originally buying in 2009, Elliott has used an active strategy to try to deliver shareholder value. Asset disposals plans, inter alia, were mooted but ultimately unsuccessful. As a result we believe Elliott is seeking a better return on the £115m of capital that its 10pc disposal represents. Gold miner Petropavlovsk fell foul of a downgrade to "reduce" from "buy" at Nomura and joined National Express at the bottom end of the mid-cap index. Indeed, the broker was bearish on the broader gold-producing sector, arguing that the investment environment for the precious metal is "deteriorating" for the first time in five years. Petropavlovsk lost 21.3 to 253.2p, its lowest level since 2008, and African Barrick Gold, which was cut to "reduce" from "neutral," slid 7.7 to 238p. Elsewhere among the gold diggers, beleaguered Avocet Mining shed 2, or 7.8pc, to 23½p after reporting a 43pc drop in earnings last year, and confirming that reserves at its Inata mine in Burkina Faso, West Africa, would be much lower than previously estimated. The shares were valued at more than 280p in 2011.