Shares in British Airways soared 8% today after weakening oil prices and a rival transatlantic operator appointed administrators.
The lower crude prices meant a poor session for heavyweight energy stocks, while a lacklustre opening in US markets saw the FTSE 100 Index give back earlier modest gains to close 14.6 points down at 6053.5.
Wall Street fluctuated between positive and negative territory after Government data suggested that Americans were still spending in April, but only to keep up with rising costs.
In London, British Airways was the leading Footsie riser – gaining 17.5p to 232.5p as investors’ hopes of a cheaper fuel bill for the airline rose amid crude oil prices of 127 US dollars a barrel.
There was also a boost from news that business-class airline Silverjet had suspended operations because of a funding crisis.
Silverjet, which has 300 staff, appointed Begbies Traynor as administrators just before the close of the session with talks over a sale of the business ongoing.
Energy-based firms littered the fallers board, led by prospector Tullow Oil, which lost 32p to 890p. Oil services group and top flight newcomer Wood’s shares were almost 3% lower, or 11.75p, at 442.25p.
BG Group was also on the back foot after it was knocked back by its target following a £6.6 billion bid to buy Australian firm Origin.
Shares fell 28p to 1266p with investors fearful that the firm may come back with a higher offer for its Australian target.
The mining sector put pressure on the Footsie after lower metal prices meant BHP Billiton eased 46p to 1914p while Rio Tinto dipped 125p to 6055p.
And the cooling in the oil price reverse had an impact on energy giant BP, off 4.5p to 608p, and Royal Dutch Shell, which slipped 40p to 2105p.
But other fuel-dependent stocks in good spirits today included cruise ship firm Carnival and rail and bus operator FirstGroup, up 53p to 1918p and 21p to 529.5p respectively.
Many banks were up after positive comments on the financial strength of the UK banking sector from rating agency Moody’s. The sector lost some of the impetus as the session progressed, with HBOS off 14.25p to 400p, although Lloyds TSB added 7p to 384p and Alliance & Leicester rose 5p to 425.5p
In the FTSE 250 Index, poker and casino gaming firm PartyGaming surged 10% amid speculation that it had reached an agreement with the US Department of Justice relating to activities prior to the introduction of US betting laws. Shares were up 26.25p at 286.5p as analysts said such a development would make the company a more attractive takeover target.
One of the other second-tier risers was Currys owner DSG International following an upgrade by Morgan Stanley. Shares rallied 1.75p to 58.25p.
The Footsie’s four biggest risers were British Airways up 17.5p to 232.5p, Johnson Matthey up 80p to 2015p, FirstGroup up 21p at 529.5p and Friends Provident which ended the day 4.1p ahead at 121.1p.
The four biggest fallers were Tullow Oil down 32p to 890p, HBOS down 14.25p at 400p, Cadbury off 18p to 674p and Wood off 11.75p to 446p.