BA turbulence sends Footsie into tailspin

Market report Emma Newlands

The London market was dragged lower after shares in the owner of British Airways took a tumble following its “catastrophic” IT failure over the weekend.

The FTSE 100 Index was down 21.12 points to 7,526.51, with International Consolidated Airlines Group (IAG) enduring a rough ride in its first day of trading in London after customers were hit by flight cancellations and delays during the bank holiday weekend.

The airline group was down 1.4 per cent to 605.5p, as the company braced for a hefty compensation bill in the wake of the disruption.

George Salmon, equity analyst at Hargreaves Lansdown, said: “While the costs of passenger compensation and refunds could well run into the tens of millions, the whole sorry episode has undeniably put a dent in BA’S reputation for delivering a premium service, and the worry for shareholders is that this unquantifiable impact could have longer-term consequences.”

On the currency markets, the pound was up 0.1 per cent versus the US dollar at $1.284, but down 0.2 per cent against the euro at €1.149.

In UK stocks, London Stock Exchange Group (LSEG) was among the biggest risers after inking a £535 million deal to buy an American analytics business from investment bank Citi. Shares were up 51p to 3,442p.

The biggest risers on the FTSE 100 Index included 3I Group, up 20p to 888.5p, TUI , up 23p to 1,192p and Glaxosmithkline, up 29.5p to 1,673p. The biggest fallers on the FTSE 100 Index included Mediclinic International, down 26.5p to 789.5p, Shire, down 148.5p to 4,503p and Old Mutual, down 5.3p to 191.3p. On the FTSE 250, the Swiss-based iron ore company operating in Ukraine rose after being initiated by HSBC at “buy” with a target price of 210p. The provider of digital services and platforms fell despite posting a slight increase in adjusted annual pre-tax profit but cutting earnings per share.