Bright start for FTSE but gains wiped out

The FTSE 100’s recent rally stalled yesterday as early gains were wiped out by international pessimism.

The index started the day brightly, lifting to its latest record high as it benefited from strong earnings updates from the likes of Whitbread and HSBC.

It spent most of the day with firm gains but slumped towards the end of trading as weaker sentiment in the US acted as a drag.

London’s top index finished 2.9 points, or 0.04%, lower to end the day at 8,144.13.

Elsewhere in Europe, trading was weaker as a slowdown in factory activity in China also impacted sentiment.

The German Dax index fell 1.08% and the Cac 40 in France ended down 0.99%.

Meanwhile, sterling dropped against the dollar as many US investors looked hopefully towards the May Federal Reserve meeting.

The pound was down 0.41% at $1.250 and was 0.03% lower at 1.170 euros at market close in London.

In company news, Whitbread shares jumped after the hospitality giant announced a major shake-up which will axe around 1,500 jobs across the UK.

The group, which owns restaurants including Brewers Fayre and Beefeater, has said it plans to slash its chain of restaurants by more than 200 in favour of building more hotel rooms.

Investors welcomed the news, with shares lifting 120p to 3,167p.

HSBC shares were also higher, rising by 27.5p to 695.6p.

The price of oil fell as talks in Cairo over a possible Israel ceasefire tempered fears of a wider conflict. A barrel of Brent crude was down by 0.9% to $82.80 as markets were closing in London.