Shares in airline stocks flew higher today as the FTSE 100 Index chalked up its fifth winning session in a row.
British Airways was in demand along with budget rival easyJet as brokers talked up recovery prospects for the airline sector.
The wider Footsie closed the day 39.82 points ahead at 5163.95 – the best finish since September 25 last year – with oil and gas-related stocks also among the prominent risers.
US markets also made modest gains in early trading as housing construction rose in August and the number of laid-off workers seeking unemployment benefits fell unexpectedly last week.
With the market bulls firmly in the ascendant, investors took weaker-than-expected UK retail figures in their stride as traders instead focused on encouraging results from B&Q owner Kingfisher, although the sector lost some momentum as the session wore on.
There were also upbeat comments from John Lewis Partnership, which said trading had been better than it had expected earlier in the year.
Kingfisher, which posted a 35% hike in half-year profits amid renewed interest in DIY among customers, was up for most of the day before finishing 2.5p off at 203p. Meanwhile Homebase owner Home Retail Group lost 1.5p to 293p after a good start.
Elsewhere fashion chain French Connection – one of the casualties of the recession – saw shares hard hit, losing 7.5p to 50p or 13% after it reported a widening in half-year losses.
In the airline sector, British Airways was up more than 5% or 12.5p to 239.9p after Goldman added the airline to its ’conviction buy’ list and said the firm’s transatlantic strength would aid a profits recovery.
In the FTSE 250 easyJet added 14.4p to 386p or 4% after Morgan Stanley lifted its rating on the company.
Back in the top flight construction group Balfour Beatty – which is set to drop out of the Footsie tomorrow night – announced plans for a £353m (€395m) rights issue, funding a £380m (€425m) deal to buy US consultant Parsons Brinckerhoff.
The deal “substantially strengthens” its presence in the US and the shares jumped almost 8% or 27.3p to 371.3p on the news.
Plumbing and heating giant Wolseley also advanced, up 30p to 1494p after Exane BNP Paribas upgraded its outlook for the European construction sector.
Oil explorer Tullow Oil meanwhile continued its strong run, up 58p to 1245p, after announcing an oil discovery in Uganda. Shares in the firm are up more than 10% so far this week amid takeover speculation and yesterday’s news of a discovery in Africa.
Other firms in the sector were also gaining ground, with Amec and Petrofac up 11p to 814.5p and 28p to 1019p respectively.
The biggest Footsie risers were Balfour Beatty up 27.3p to 371.3p, British Airways up 12.5p at 239.9p, Tullow Oil up 58p to 1245p and Pennon up 15.5p to 504p.
The biggest Footsie fallers were Lonmin down 48p at 1783p, Eurasian Natural Resources off 21.5p at 895p, Icap off 7.3p at 427p and Sage down 3.7p at 223.8p.