Fears of price war cause airline shares to tumble
UK shares had a difficult start to the week with the FTSE 100 down 1% at 7,378 on Monday, while the FTSE 250 was down 0.7%.
Airline shares fell after Ryanair raised fears of a price war in the sector. EasyJet and British Airways owner IAG were down 2.82% and 0.76% respectively.
Households products giant Reckitt Benckiser was the biggest FTSE 100 faller, down 3.27% after reporting “tough market conditions” and a 2% decline in second quarter like-forlike sales.
Among the few blue chips bucking the downbeat mood were mining major Anglo American, which rose 1.19%, and the technology business Micro Focus International, up 1.46%.
The mood brightened in early trading on Tuesday. London shares were pushed up by positive results from Games Workshop and property investment and development company Segro. News also broke that Michael Kors has agreed to buy fashion house Jimmy Choo for £896m.
Investors can expect a flood of corporate news later this week, as many high-profile companies issue their final or half-year results.
Last week, the FTSE 100 was up 1% overall – its biggest weekly gain for two months. On Friday, however, it was down 0.5%. Paddy Power Betfair fell 2.7% after a broker forecast it would miss profit expectations, while Royal Dutch Shell was off 1.2%.
The FTSE 100 rose 0.8% on Thursday, led by a 3.1% gain for equipment rental group Ashtead. WPP also added 2.1% after Unilever said it would reverse a cut to advertising budgets. But EasyJet dived 5.9% amid caution about excess capacity as it announced third-quarter results.
On Wednesday, the UK blue-chip index was up 0.6% after US stock markets hit new record highs. Reckitt Benckiser added 1.6% after selling its food business for $4.2bn to US group McCormick. Housebuilders were also up on positive broker comment, with Barratt Developments 2.4% ahead and Persimmon gaining 2.3%.
Last Tuesday saw the FTSE 100 down 0.2%, but British Land gained 3.1% on news of a £300m share buyback.