Footsie edges into the black

Shares in British Airways and cruise firm Carnival made headway today as concerns eased over the long-term effects on travel demand from the recent terror scare.

Both stocks moved up the blue chip leaderboard as flights to and from the UK moved back towards normal service.

But there was little to cheer elsewhere as the London market again struggled for direction with the FTSE 100 Index up just 3.8 points to 5900.4.

And with the end of the week approaching, trader Jimmy Yates, of CMC Markets, said the Footsie “seems set to struggle to break any higher”.

Cruise firm Carnival topped the leaderboard with gains of more than 6% – or 130p to 2172p – as investors took advantage of its low share price and recovering demand for travel following last week’s alleged terror plot at UK airports.

It was followed up by British Airways as its service looked set to return to normal tomorrow following severe disruptions which have seen the airline ground more than 1,000 flights. Shares in BA lifted 10.25p to 393p.

It was an indifferent day for miners and oil stocks however as the weakening price of gold and crude was offset by the prospect of steady interest rates in the United States as fears over rising inflation eased.

Miners Vedanta and Anglo American gained 42p to 1383p and 47p to 2420p respectively while rival Xstrata slipped 19p lower to 2266p. Anglo American benefited after Morgan Stanley upgraded it from underweight to overweight and said the sector was being driven by merger and acquisition activity.

Oil giant Royal Dutch Shell was also in retreat – off 20p to 1917p – although BP lifted a penny to 609p.

Steel giant Corus was also in the black – up 12.5p to 407.25p – following speculation Evraz and Servestal were considering bids for the firm.

And PartyGaming lifted 4.75p to 113.5p which analysts said was a correction after shares took a hit following BetonSports decision to close its US operations.

But service group Rentokil Initial was off 4.25p to 161p following a downgrade from UBS.

Interest in the FTSE 250 Index was focused on MFI’s confirmation that it could dispose of its retail arm in a deal which would see both MFI and a private equity firm make contributions to the ailing business. The company warned this would dilute shareholder value, but investors appeared relieved at the possibility of a disposal and lifted shares 2p to 89.5p.

Engineering firm Weir Group lifted 19p to 459p after reporting a 50% rise in underlying pre-tax first half profits and said it was confident for its prospects for the full year.

Elsewhere, Poundstretcher owner Instore jumped 17% – 4.75p to 32.25p – after setting out plans to “modernise and update” its stores as part of a review aimed at boosting profitability.

The day’s biggest blue chip risers were Carnival up 130p to 2172p, PartyGaming up 4.75p to 113.5p, Old Mutual up 5.5p to 162.75p and Corus 12.5p higher at 407.25p.

The heaviest fallers were SABMiller down 31.5p to 1040p, Rentokil off 4.25p to 161p, Drax 22.5p lower at 930p and Shire off 17p to 864.5p.