British Airways pushes FTSE down

British Airways led the London market lower today amid concerns over soaring oil prices.

The flagship carrier warned its fuel bill could increase to £2.5bn (€3.27bn) in the next financial year as crude set a new record above $105 a barrel.

Worries over the impact of the price hike overshadowed trading, with the FTSE 100 Index 25.2 points lower at 5828.3 by the mid-session.

The Bank of England's decision to leave interest rates unchanged - though widely expected - also offered little in the way of encouragement to the market amid persisting inflation concerns.

BA was the biggest blue-chip casualty - off 5%, or 13.25p to 251.75p - as it painted a gloomy picture of prospects. Operating margins of 7% expected in 2008/09 contrast with the 10% likely to be achieved in the year to the end of this month.

The downbeat sentiment also knocked easyJet, which fell 10.5p to 415.25p in the second tier, while in the top flight, fuel-dependent cruise ship giant Carnival also lost 39p to 1978p.

Another big loser was Marks & Spencer after rival John Lewis warned of continued tough trading conditions this year.

John Lewis said sales growth at its department stores had dipped in the first five weeks of its new financial year. Marks' shares were down 9p to 392.5p as a result.

Energy provider International Power posted London's biggest improvement, up more than 6% or 22p to 383p, after it delivered a 17% rise in full-year operating profits thanks to contributions from acquisitions last year.

The numbers were in line with market expectations and with further positive results from power company E.on to cheer the sector, Centrica gained 7.5p to 326p while British Energy advanced 20p to 567p.

Results from housebuilder Taylor Wimpey also recovered some ground through the morning after dropping in early trading in the wake of cautious guidance for 2008.

The company posted a full-year loss for 2007, reflecting write-downs on land values in the United States and Spain, but said cancellation rates had fallen in its main UK market. Shares were up 0.7p to 165.2p following a buy recommendation from Citigroup.

Copper miner Kazakhmys meanwhile gained 25p to 1758p after in-line results. Although rising costs and production issues hindered the firm's profits performance, analysts believe that high commodity prices will continue to give long-term support to the company.