Go-Ahead sparks transport sell-off on FTSE

Rail and bus operator Go-Ahead sparked a major sell-off for shares in transport companies today.

While the group posted strong half-year figures, investors reacted nervously to guidance on recent trading and the possible impact of a slowing economy on the Southern and Southeastern train operator.

Banks also struggled, dragging the FTSE 100 Index 11.3 points lower to 5868 by mid-morning.

A late sell-off on Wall Street, following Federal Reserve chief Ben Bernanke’s gloomy testimony to the US Senate, put the market under pressure, although hopes of a strong opening in New York later today limited some of the impact in London.

Stronger mining stocks and a gain of more than 1% for market heavyweight GlaxoSmithKline offset losses elsewhere in the market.

Vedanta Resources set the pace with a rise of 2% or 50p to 2054p, while Glaxo rose 16p to 1117p after it emerged that the holding company of billionaire investor Warren Buffett had taken a stake in the pharmaceuticals giant.

Transport operator FirstGroup led the fallers board, down 5% or 33p to 613p, after shares fell heavily in reaction to the guidance from second-tier rival Go-Ahead.

The Newcastle-based operator also detailed a rising fuel bill and declining rates of growth in rail passenger journeys.

Shares tumbled 16% or 350p to 1885p, dragging FTSE 250 counterparts Stagecoach and National Express 16.25p and 33p lower at 230p and 1094p respectively.

Back in the top flight, Alliance & Leicester dominated a depressed banking sector with a fall of 19p to 524.5p. Banks have been under pressure amid concerns about full-year results due in the next few days.

Bradford & Bingley, which took a hammering after revealing higher write-downs earlier this week, was off another 5% or 9.25p to 177.25p – another all-time low for the West Yorkshire-based company.