MARKET REPORT
Travel and leisure stocks dragged the London market lower as investors responded to Saturday’s terror attack.
The FTSE 100 was down 21.87 points at 7,525.76, with tourism-focused firms under pressure in the first trading session since the atrocity.
Budget airline easyJet and British Airways-owner IAG were down 45p to 1,344p and 15.5p to 592p respectively, while Merlin Entertainments, the firm behind the London Eye and Alton Towers, fell 13p to 524p.
London’s premier index also suffered at the hands of the pound, which lifted after the latest ICM poll gave the Conservatives an 11-point lead over Labour. Foreign exchange markets are buoyed by the prospect of a Tory victory as some currency traders believe the Tories would handle the UK economy better than Labour. Sterling was 0.2% ahead versus the US dollar at 1.291, with mining giant Antofagasta down more 3%, or 28.5p, to 776.5p.
Blue-chip companies, which report in US dollars or euros, can struggle on the FTSE 100 when the pound rises because their earnings suffer from a less favourable currency translation.
The pound also climbed 0.5% against the euro at 1.148 despite an economic update for the services sector showing a sharp slowdown in activity. Output in the services industry eked out its slowest growth since February and came in shy of expectations as inflation and General Election uncertainty took its toll last month.
The Markit/CIPS services purchasing managers’ index fell to 53.8 in May, down from 55.8 in April and below economists’ expectations of 55.0.
On the oil markets, Brent crude tumbled 1.5% to US $49.21 a barrel after five Arab countries cut ties with Qatar amid claims it is supporting regional terror groups. The move has sparked concern that it could disrupt efforts to drive down oil production and tackle the glut in the market.
In UK stocks, online grocer Ocado saw shares surge before slipping back after it sealed a deal with “a regional European retailer” for its software platform. Shares in Ocado closed down 3.8p at 312.2p.
The biggest FTSE 100 risers were Old Mutual up 4.5p to 201.5p, Standard Chartered up 8p to 753p, Marks & Spencer up 3.4p to 371.1p, and Next up 39p to 4,400p. The biggest fallers were Antofagasta down 28.5p to 776.5p, easyJet down 45p to 1,344p, Sage Group down 19.5p to 709.5p, and Whitbread down 109p to 4,116p.