Half-term flightmare grounds travel stocks
Travel sector shares took a hit as fears over impending chaos at airports and rising fuel prices weighed on the industry.
EasyJet shares descended 3.3pc or 17.6p, to 517.6p, Wizz Air tumbled 5.6pc, or 174p, to 2920p and British airways owner IAG fell 5.5pc, or 7.4p, to 127.64p.
Package holiday groups were also on the slide with Tui down 2.8pc, or 5.45p, to 191.6p and On The Beach shedding 2.6p, to 5.5p, to 202.5p.
The travel industry has been beset by chaos in recent months with hundreds of flights cancelled amid shortages of staff as both airlines and airports struggle to ramp up worker numbers that were cut back during the pandemic.
The situation has been exacerbated by a surge in demand ahead of the half-term holidays as well as many passengers holding vouchers for trips that were previously cancelled due to Covid-19.
The pain for travellers increased after Tui announced it was cancelling a quarter of its flights from Manchester airport, one of its biggest bases in the UK, threatening to upset the travel plans of around 37,000 holidaymakers.
The chaos came as airlines faced the prospect of even higher fuel costs after Brent crude hit $124 a barrel. The price jump was sparked by EU officials agreeing to ban around 75pc of russian oil imports after overcoming resistance from Hungary, which relies heavily on russian crude to fuel its economy.
Shares in Shell went up 0.3pc, or 6.5p, to 2380.5p, BP climbed 0.2pc, or 0.75p, to 434.25p and North Sea-focused Harbour Energy rose 1.4pc, or 5.3p, to 384.2p.
victoria Scholar, of online investment service Interactive Investor, predicted crude prices would retain their upward momentum as the EU ban would exacerbate ‘the imbalance between supply and demand’.
Supplies are also expected to be squeezed by the end of lockdown restrictions in China and a lack of increased production from the Opec+ group of oil-producing nations which includes Saudi arabia and Iran.
Despite the negative sentiment surrounding global markets, the FTSE 100 was up 0.1pc, or 7.6 points, to 7607.66.
Telecoms giant BT jumped 1.8pc, or 3.3p, to 187.25p after unveiling a multi-million pound deal with Swedish rival ericsson to offer private 5G networks to businesses across Britain. The networks will allow firms to use devices that can communicate with each other across the internet securely and at high speed.
Nelson Peltz’s appointment to the board of Unilever lifted the consumer goods giant 9.4pc, or 329.5p, at 3825p, and companies paying hefty dividends as investors searched for more secure places to park their cash also did well. Tobacco giant BAT gained 1.3pc, or 46p, to 3502p and rival Imperial Brands rose 1.2pc, or 21p, to 1790.5p.
The mid-cap FTSE 250 fared less well, falling 0.6pc, or 128.94 points, to 20417.95.
Burberry received a vote of confidence from analysts at Barclays, who hiked the target price on the stock to 2070p from 1960p after upgrading their earnings forecasts. The shares edged up 0.5pc, or 8p, to 1713p.
Housebuilders were dented after mortgage approvals dropped to their lowest level in nearly two years as higher interest rates and the cost of living crisis cooled the property market. Taylor Wimpey dropped 1.8pc, or 2.35p, to 130.1p, Barratt slipped 1.8pc, or 9.2p, to 504.8p, Berkeley lost 2.1pc, or 89p, to 4200p and Persimmon shed 3.4pc, or 77p, to 2177p.
Water group Pennon fell 2.7pc, or 28p, to 1001p after warning that earnings would be hit in the near term by rising inflation.