FTSE 100 close: Shares shake off flu fears
Shares in airlines and travel companies were down by as much as 8% today as fears over the impact of the swine flu outbreak gripped the London market.
You swine: Markets have felt nerves on fears of a flu pandemic
British Airways was the worst performer in the FTSE 100 index today, recording a fall of more than 7% or 12p to 151.9p. BA operates four flights a week to Mexico City, and said this morning it is 'operating as normal'.
Blue Oar Securities' Mark Brumby says, 'Without scare-mongering, it is worth pointing out the current outbreak of swine flu, which is centered on Mexico but which has spread to the US, is unlikely to do much to encourage travel.'
He adds: 'In recent years the SARS and avian flu scares have depressed travel volumes materially'. Budget airline easyJet also lost 12p to 323.25p in the second tier.
News of the Mexico outbreak sent the Footsie lower for most of the day, but a stable open on Wall St saw the index close 11.0 points up at 4,167.0. The Dow Jones was last up 32.9 points at 8,109.2.
Blue-chip holiday companies were high up the fallers board as Thomas Cook fell 12.5p to 270.35p, Thomson Holidays owner TUI Travel shed 9p to 262.75p and cruise operator Carnival was 132p down at 1807p, or 7%. InterContinental Hotels lost 28.5p to 643.5p.
But the major drugs firms gained ground on the news. AstraZeneca was 89p better off at 2483p, GlaxoSmithKline up 57.0p to 1063p and Shire ahead 15.5p to 890.5p.
In an otherwise quiet day for corporate news insurance giant Aviva topped the Footsie risers' board after reporting new business sales last year of £9.57bn, up from a year-ago figure of £8.61bn and beating analyst consensus expectations of £8.44bn.
The group confirmed its capital position remains strong, with surplus capital rising to £2.5bn from £2bn at the end of December. CEO Andrew Moss said sales were 'resilient', and action had been taken to 'improve margins in key markets'. Looking forward he added the group 'continue to navigate a steady course through challenging times'.
Richard Curr, head of dealing at Blue Index, however, says that traders and investors are taking profits in Aviva.
'Blue Index feel the life industry in general is still weak,' he says, 'and following a strong performance from the shares in recent weeks, we see a round of profit taking. Accordingly we are short-term sellers with a target price of 230p.'
The stock closed 13.75p ahead at 287p.
Meanwhile, Scottish & Southern Energy advanced 38p to 1103p after striking a five-year deal for coal supply with UK Coal, which was up 8.75p at 115p after also reporting in-line full-year results.
Back in the top flight, Dairy Milk maker Cadbury made progress, adding 10.5p to 506.5p as UBS brokers upgraded the firm ahead of a trading update due on Thursday.
But housebuilders were dealt a blow by figures showing a disappointing 7% fall in the number of mortgages approved for people buying a home in March.
This hit several players in the FTSE 250, including Taylor Wimpey, which showed a 7% or 3.25p fall to 43.25p. Barratt Developments and Bovis Homes shed 4.5p to 151.5p and 16.5p to 445.25p respectively.
3i Group was the biggest faller in the FTSE 250 Index after it confirmed it was looking at plans for a rights issue to pay down debt. The Financial Times said the cash call could be for as much as £700m, but with the dilutive impact of such a move unnerving investors shares in the private equity firm fell 53.75p to 318.0p.
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