Footsie ends week on a low

The FTSE 100 Index ended the day on a negative note today after failing to maintain the three-and-a-half year highs reached earlier in the week.

The blue-chip index extended yesterday’s decline with a further fall of 12.8 points to 5345.8, suggesting its recent rally was running out of steam.

Downbeat sentiment was shared by investors in New York, with the Dow Jones Industrial Average standing around 90 points lower by closing time in London.

At home, most eyes were on British Airways as analysts warned the wildcat strike that caused the airline to cancel flights could cost the company anywhere between £10 million and £40 million. The higher figure is equivalent to 8% of the company’s forecast annual profits of £520 million.

BA shares were down by as much 2% early on, but recovered to stand less than 1% cheaper, off 2.25p at 290p.

In addition to the strikes, investors in BA are also concerned at the impact of rising fuel costs after a barrel of crude oil rose above 66 US dollars to new record levels.

Oil-dependent stock Carnival was also in the red – the cruise operator was the heaviest Footsie faller after slipping 2% or 65p to 2886p.

The oil price hike could not spark shares in BP and Royal Dutch Shell into life, however, with the oil majors falling 7p and 22p to 647.5p and 1923p respectively.

BT matched the fall from BA as shares dipped 2.25p to 218.75p after investors lost the right to the latest dividend payment. Unilever was also under pressure, falling 6.5p to 562.5p.

The insurance sector was doing its best to prop up the market at the end of a week when many of the biggest firms reported numbers.

A clutch of companies recovered losses yesterday, with Prudential up 1.75p at 526.75p, although Royal & Sun Alliance failed to hold on to earlier gains to finish unchanged at 92p. Worries over UK life and pension margins continued to impact on Norwich Union owner Aviva, which was down another 8p at 636p.

Elsewhere, the prospect of a takeover battle sparked frenetic buying of shares in Collins Stewart Tullett after the broker confirmed a number of bid approaches. Its shares rose 24% or 121p to 633.25p and also boosted those of FTSE 250 Index rival ICAP – up 10.25p at 322.25p.

Back in the airline sector, second-tier company easyJet lost hold of early gains to stand 11.5p weaker at 293p. That was after the boss of Icelandair owner FL played down speculation of a bid for easyJet following a recent sharp rise in the UK company’s share price.

The highest Footsie risers today were O2 up 4p to 149.5p, Schroders NV rising 19.5p to 814.5p, Reckitt Benckiser up 40p to 1720p and Schroders adding 20p to 898.5p.

The heaviest fallers were Carnival falling 65p to 2886p, Reuters down 5.75p to 359p, Aviva off 8p to 636p and BAT down 13p to 1103p.