The London market slid into the red today after details of a “mass murder” terror plot emerged but shares recovered substantially throughout the session as investors showed confidence in blue-chip stocks.
Airlines were among the worst hit – with British Airways 5% lower – after police said they had foiled a major plot to “commit mass murder on an unimaginable scale”.
The FTSE 100 Index tumbled 100 points in the first hours of trading reflecting the concerns in the travel industry before regaining much lost ground to close 37.1 points lower at 5823.4.
Prior to the alert, analysts had expected the Footsie to open around 40 points down, reflecting a drop of 97 points for the Dow Jones Industrial Average overnight.
BA was the day’s biggest faller as shares shed 19.75p to 370.25p as more information was revealed about the plot to destroy up to ten passenger jets in mid-air.
The airline was followed lower by hotels group InterContinental with a 3% slide, down 31p to 834.5p as most companies associated with travel and leisure took a hit.
In the FTSE 250 Index, tour operator MyTravel fell 4.25p to 208.5p while easyJet slipped 8.75p to 414p and Ryanair fell 0.11 cents to 7.42 euros.
Car rental firm Avis Europe was the second heaviest faller with a drop of 5% or 3.5p to 63.5p. The firm relies heavily on air passenger customers.
And newsagent WH Smith lost almost 1% – down 3.25p to 481.5p. Its shops are prevalent at airports and the fact unessential items are now banned from planes will hamper sales, analysts noted.
Away from the travel industry, mobile phone giant Vodafone fell 4.5p to 112p due to negative sentiment in the sector after Germany’s Deutsche Telekom cut its revenues and profits guidance for the year and blamed fierce competition in its home market. BT was also down 2% or 6p to 243.5p.
And online gaming stocks came under pressure as it emerged Austrian online bookie BWIN had lost its licence in Germany. PartyGaming tumbled 1.25p to 111p while Sportingbet fell 2p to 270p.
Although earlier today only a handful of shares in the top flight were trading in the black, a significant number recovered.
International Power topped the risers board with a gain of 10.25p to 316.5p. The improvement reflected forecast-busting half year results from the power station operator.
Investors favoured safer sectors such as utilities, meaning water company Kelda rose 15.5p to 819p, National Grid gained 3.5p to 623.5p, United Utilities added 3.5p to 667p and Severn Trent was up 5p to 1275p.
Supermarkets were also on the front foot with Tesco adding 4p to 365p and Morrison up 2p to 220p.
The day’s biggest blue chip risers were International Power, up 10.25p to 316.5p, Xstrata up 52p to 2242p, Kelda up 15.5p to 819p and SABMiller up 17.5p to 1039.5p.
The day’s biggest blue chip fallers were British Airways down 19.75p to 370.25p, Smiths off 41.5p to 840p, Vodafone down 4.5p to 112p and InterContinental off 26.5p to 839p.